Go for it
the cosworth engines of the 80s and early 90s were 2.0litre and pushing out 600bhp+ so a 1.8 making 300bhp is easily doable and when you look into bike engines some of the Hayabusa's make over 300bhp without breaking a sweat using standard internals and are 1300cc with a supercharger or turbo plumbed in, Jack Frost at Holeshot racing has made mega power with these engines 700bhp+. I think cooling would be your only problem as these K series engines have a bit of an issue though the Lotus boys dont seem to have so much of an issue from what I understand,