This paper introduces VPreg, a novel diffeomorphic image registration method. This work provides several improvements to our past work on mesh generation and diffeomorphic image registration. VPreg aims to achieve excellent registration accuracy while controlling the quality of the registration transformations. It ensures a positive Jacobian determinant of the spatial transformation and provides an accurate approximation of the inverse of the registration, a crucial property for many neuroimaging workflows. Unlike conventional methods, VPreg generates this inverse transformation within the group of diffeomorphisms rather than operating on the image space. The core of VPreg is a grid generation approach, referred to as \emph{Variational Principle} (VP), which constructs non-folding grids with prescribed Jacobian determinant and curl. These VP-generated grids guarantee diffeomorphic spatial transformations essential for computational anatomy and morphometry, and provide a more accurate inverse than existing methods. To assess the potential of the proposed approach, we conduct a performance analysis for 150 registrations of brain scans from the OASIS-1 dataset. Performance evaluation based on Dice scores for 35 regions of interest, along with an empirical analysis of the properties of the computed spatial transformations, demonstrates that VPreg outperforms state-of-the-art methods in terms of Dice scores, regularity properties of the computed transformation, and accuracy and consistency of the provided inverse map. We compare our results to ANTs-SyN, Freesurfer-Easyreg, and FSL-Fnirt.