yes and no. Being a bit pedactic here.
The following comments are in general and not in reply to MiTasol.
By the time the Spitfire entered production (mid 1938) the Merlin was the most powerful V-12 engine in production
at Altitude (anywhere near 15-16,000ft).
Other engines may have beaten it a low altitude. RR could
change supercharger gears and become the most powerful low altitude engine.
British then shot their fighters in both feet with the prop selection.
Fixed pitch prop was like a car locked in high gear. It could go fast but accelerating or climbing hills really sucked.
Two Pitch prop was like a car with a 6 speed box with 2,3,4 and 5th gears blocked off. Car can do either 25mph or 150mph. Can accelerate will well up to 25mph but then shifting and trying to get up to 150 takes a long time. And trying to climb a hill at 50mph is really hard.
CS prop is a variable speed drive between the lower and upper limits.
We are discussing the suitability as interceptors and as longer range aircraft and in these 1938-39 aircraft even with constant speed props around 440-450lbs could add over a minute to 20,000ft and 4-5 minutes climbing to 30,000ft. The Merlin III was supposed to use 2600rpm when climbing, not the later 2850rpm.
The planes gained 400-600lbs from prototype to early production with more equipment.
The early planes could not carry an extra 30-40 gal of fuel and fight well, mostly climb and turn, with poor excess power it doesn't matter so much about turn radius, what is important is being able to turn and not loose too much altitude.
Things changed with 12lb override and the Spitfire IIs could get to 25,000/30,000ft several minutes quicker than a Spitfire I could when not using boost override.
Radar also was giving advanced warning.
Things were looking much better for adding fuel to fighters in late 1940 than it did in 1938. Now was when some of the air ministers may have made mistakes, but in 1938 they probably made the right choices or they could have saddled the RAF with "British P-40s". Fast but heavy and can't climb for crap.
Be careful what you ask for, you just might get it

Internal fuel that can't dropped needs heavier structure for maneuver if bounced early. Also needs heavier structure and landing gear to land safely if engine craps out right after take-off. While taking off it is crash regardless of weight.
Once the shooting starts some of the safety rules tend to fade a bit. Crashing a higher than "normal" rate of aircraft in take-off and landing accidents is not a good thing and crash rate was pretty high as it was compared to even 1960s standards.
Only some fighters got more fuel as they got newer models. And sometimes it took considerable modification to add internal fuel.