Ethereal music drifted above us into the pale blue cloud- less sky, blonde-haired red- cheeked children were on their parents' shoulders and there was a worrying display of woolly lopipeysa jumpers on Icelanders of every age from 0 to 60, considering that this city is famed for its cutting-edge fashion.

Under the glare of the midnight sun, I saw the cream of Icelandic music perform in a festival celebrating the environment in Reykjavik last year, and it's one of the expe- riences of my life.

It ended somewhat less poetically in the upstairs bar at Kaffebarinn, where I was teaching two Aussie visitors to love Brennivin, the Icelandic spirit brewed from fermented potatoes and flavoured with car- away seeds, while sharing my spot at the bar with the lead singer of Sigur Rós, a gaggle of dancers from Björk's show in neon tribal make-up, and a transatlantic stag party. When I collapsed into bed mid-morning, the sun was still blazing through the window as it had all night.

My love affair with Reykjavik started long before the economic crash, when a pint of beer still cost around £5 (it's now about £2). In January, The Economist's annual study rating the most expensive cities in Europe put the city at 62, from a previous position at number five, making it the lowest featured city in Western Europe bar Manchester.

It's a real shock to the system - for years the reason why people haven't been visiting the world's northernmost capital city has been the price, but now there's no excuse.

Party town
Sure, Reykjavik has an outsized reputation as a party town, but it's barely as big as Bath. In fact, the population of Iceland as a whole is roughly the same as that of Norwich, which gives you some idea. Reykjavik is about half the size of that; when viewed from the air it looks like someone has scattered a handful of multi- coloured dolls houses around a small lake. It is really that tiny.

That makes the city a great destination for a short break. Book a hotel in the 101 district and you can't go wrong: all the city's main sights are on your doorstep. The strange-looking concrete Hallgrimskirkja (Hallgrims Church) is visi- ble from nearly everywhere, and it's worth starting out here, taking the lift to the topand looking at the city from above to get your bearings.

You'll see Faxaflói Bay, where you can take whale-watching trips, Mount Esja, usu- ally some kind of purple colour and topped with snow, and then in the background, the cone-shaped glacier on Snaefellsnes, where, in Jules Verne's Journey to the Centre of the Earth, the explorers started their descent.

Icelandic cuisine
Wandering around the city itself is fun - it's lined with coffee shops and designer bou- tiques as well as more traditional shops sell- ing wool and wool products, stuffed puffins, bags made from fish skin and the like. Bargain hunters might like the Kolaporti market, particularly the fish market at the back. There are two delicacies that you'll find here but nowhere else - Hákarl and har_fiskur.

The first is a real spe- ciality that you can try for free in the market. Word warning - don't take too much. It's made from Greenland shark, buried in Tupperware underground for three months to rot, and then excavated and served when it is at the right texture. The edges are slightly gooey and centre is chewy; unsurprisingly, it hasn't taken off anywhere but here.

Har_fiskur is a dried and salted white fish eaten a bit like crisps by the local chil- dren. It still tastes of fish, though it's crunchy and salty, and takes some getting used to.

That's not all there is to say about Icelandic cuisine - it's a whole story in itself- but suffice to say that you will find restaurants where you can eat grilled puffin, seabird's eggs, dolphin and whale and boiled sheep's head among other strange delights.

There was once a McDonalds in the centre of the city, but it closed down through lack of custom. It wasn't just that a meal cost £10; taste buds are made differently up here


Modern art

While wandering round the city, drop into the Town Hall, perched on a lake, which has a relief map of the country in it and a cafe. Nearby, the Harbour House art gallery is one of the city's finest if you like modern art. It celebrates Erró, a 1960s artist who has a lit- tle in common with Peter Blake (who created The Beatles' Sergeant Pepper album cover) and is all high colour and shock factor. Downstairs are modern installations.

And if you're intrigued to find out more about modern art, don't miss the Lost Horse Gallery. Run by local artists, it's got a mod- ern flavour but tends to mix styles so you never quite know what you're going to see. The gallery is actually an old animal shed and has a charming history.

Back in the days before cars, farmers used to ride into town on their horses to do business, and then, as now, successes were celebrated in the pub. The shed acted as a kind of horse pound for the owners who lost their horses due to reckless drunkenness, and they had to pay to get them out.

You can still see grooves in the floor and hooks where they were tethered on the walls, although you won't see horses in the city today. But you can ride Icelandic horses close to Reykjavik.

Viking history
History knits this city together. From the stat- ue of Ingólfur Arnarson, the first settler, on the hill overlooking downtown, to Sólfar, a sculpture of a Viking boat that sits on the path around the harbour and bay area, you can't miss the marauding past. Icelanders can trace their genealogy way back to the Saga times - the island wasn't settled until 871 - and the fiercely independent attitude of their forebears has definitely filtered down.

There's a pride in being different, tough and in tune with the environment here that you don't feel anywhere else in the world, and you can see it in the fashion, art, music and drinking ability of the locals.

My favourite Viking sight has to be Thingvellir National Park. This area, outside the city but easily reachable on a day tour, is where the Vikings held their meetings and the location says as much about them as anything else.

A river runs through the valley where dissenters were drowned and a large black cliff rears up at its edge. There is a rift in it that excites geographers - it's the exact place where the American and European tec- tonic plates are pulling apart from each other, at a rate of approximately 2cm a year.

Golden Triangle
Thingvellir is one third of the Golden Triangle, the three key sights to visit outside the city. Gullfoss is another of these; the golden waterfall, where Odin's horse is said to have left a hoof print that formed into a circular, many-tiered waterfall bringing gla- cial water down to the land.

Rainbows play in the light and its roar is deafening. Geysir, the farthest away, is the water spout that gave the world the name geyser. It's actually a collection of spouts in a geologically active zone and it goes off regularly, to the delight of photographers and onlookers.

A trip to the Blue Lagoon will round things off nicely; it's where nature, beauty and the country's strange energy combine to create a swimming pool and spa like no other in the world, whether it's snowing, sunny or blowing a gale. Enjoy the weird- ness - that's what Iceland is all about. Reykjavik facts

When to go
It all depends on what you want to see. For midnight sun, head north from June to mid-August. For the Northern Lights, try November to March. The spring and autumn months have a lot to recommend them, but can be wet; bring an umbrella, and expect a roughly-balanced night and day. Most tourists visit from May to September when it's warmer and light (but expect showers and cold winds). For nightlife, you need to be there on a Friday or Saturday night.

Getting there
Icelandair (www.icelandair.co.uk) and Iceland Express
(www.icelandexpress.co.uk) both serve Reykjavik, flying into Keflavik Airport. Icelandair flies twice daily from London's Heathrow, while Iceland Express moved its daily service to Gatwick on May 1. A bus runs to Reykjavik from the airport, taking about an hour, and costing significantly less than a taxi (www.flybus.is).

Accommodation and eating out
Reykjavik's tourist board has good recommendations on where to stay on all budgets - check out the city's tourist office website, www.visitreykjavik.is, or www.accommodation.is.Or visit www.iescape.com for boutique hotels and city centre apartments. A new youth
hostel opened by the old harbour this spring:www.hostel.is. Iceland's youth hostels rank in the top five in the world, according to Hostelling International. For food, check out www.icelandgourmetguide.com for the best unusual and gourmet places to eat.

Tour operators
Icelandair and Iceland Express offer some good value
long weekend packages. Other good package operators to the country include Discover The World (www.discovertheworld.co.uk), Regent Holidays (www.regent-holidays.co.uk) and Trailfinders (www.trailfinders.com).

Excursions
Day trips to the Golden Circle, Geysir,Thingvellir National Park and into the countryside are available through the city tourist office or through recommended tour operators Touris (www.tour.is) or Reykjavik Excursions (www.re.is).There is also a bus that will take you to the Blue Lagoon on the way to the airport - perfect for a long weekend - with Iceland Excursions (www.icelandexcursions.is).

Getting around
The city itself is walkable, particularly if you're staying in the 101 district in the centre of the city.Taxis can be taken from the centre of Reykjavik, outside the tourist information centre and are reasonable for short distances within the city area.

Tourist information
Iceland Tourist Board:www.icetourist.is
Reykjavik:www.visitreykjavik.is, Adalstraeti 2, 101 Reykjavik. Tel. 00 354 590 1550;info@visitreykjavik.is

All prices and details were correct when published in tlm - the travel & leisure magazine, please check before you visit Iceland's Reykjavik.