TOM MORGAN marvels at the eerie Northern Lights and Iceland's intriguing mix of snow, geysers and volcanoes

"STEP  on it boys!" An excited Viking voice crackles over the giant 4x4's CB radio and our driver Ragnar puts his foot down.

We are hunting for one of the world's greatest natural phenomena, the Northern Lights, in Iceland's capital Reykjavik and our scout has spotted some activity beyond the city limits. But there is a problem. We need to get there quickly to revel in the full glory before it is obscured by light pollution and clouds.

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Ragnar spins the wheel of the Ford Econoline - a people-carrier on steroids with 46-inch tyres - and we roar across fields into the velvet black night. He switches off the powerful headlamps and the sky above us turns an emerald green.

The Northern Lights are officially called the Aurora Borealis but are also known as the "dancing men" and "the dance of the spirits" for good reason. Occurring within the Arctic Circle between the two equinoxes in September and March, the scientific explanation is that they are caused by the electric particles fired from the sun burning up in the Earth's atmosphere.

But this theory doesn't quite capture the magnificence of the spectacle as we watch halos arc gracefully across the night sky, the sight which inspired author Philip Pullman to write his award-winning His Dark Materials trilogy. Standing on the hilly scrubland, my eight strong group are frozen like statues - and it has nothing to do with the sub-zero temperatures - as we watch the 40-minute light show.

We were feeling pretty chilly by the time we returned to cosy, lodge-style Hotel Ranga, an hour's drive from the capital, where we were greeted by a towering stuffed polar bear in Dazzled by the dancing spirits the lobby. The hotel is situated on the winding Eystri-Rangá river that offers some of the finest salmon fishing in the world. That night we feasted on 20 types of smoked salmon cured in everything from chocolate (not the best, frankly) to tequila (cheers!).

I retired to my comfortable, log cabin-style room with a veranda overlooking the looping river.

The following day we set off on our next adventure across the volcanic-rock landscape, the perfect terrain for Ragnar's fleet of Land Rovers. We had a new driver, also called Ragnar.
It seems everyone's called Ragnar in Iceland. To add to the confusion there's a good chance of meeting someone called Ragnar Ragnarson - meaning "Ragnar, son of Ragnar". Christmas cards must get complicated.

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He bashed the white motor over shingle hills and along rough roads as he took us on what is known as the 150-mile Golden Circle tour of volcanoes, mountains, waterfalls and geysers. It's the perfect illustration of why Iceland is also called "the country of fire and ice".
We stopped at the stunning waterfall Gullfoss - which means "golden falls", inspired by the spray capturing the sunshine - before heading to Haukadalur, where hot natural springs surge to the surface in scalding columns of water.

Here is the original Geysir, which leant its name to all the geysers across the world but is now lying dormant.

Instead, the nearby natural cauldron of Strokkur provides the biggest draw, boiling over every three or four minutes.

The final destination was the stunning national park of Thingvellir, the home of the country's medieval parliament and now one of the most celebrated locations in Iceland.
You can simply bend down and scoop up handfuls of the ice-cold, clear mineral water in the rivers and streams.

Amazingly, when you turn on a tap in a town this is what flows out, making even brushing your teeth a treat.

After all this fresh air and being blasted by waterfall spray, many holidaymakers might have been heading for their beds. But an early turn-in isn't really an option in Reykjavik, one of the world's great party destinations. The economic downturn means people no longer have to shell out £8 for a pint of beer; bar prices are now on a par with British cities. This is a good thing as Reykjavik has some of the best drinking dens in the world including Kaffibarinn - a bar reputed to be partowned by Blur frontman Damon Albarn just off the main drag of Laugavegur.

We rolled in at just after midnight on Saturday, with a scattering of local hipsters settled in over their drinks. By 3am the place was heaving with beautiful people enjoying an Eightiesinspired electro DJ set.

The city's population is just 120,000 and it felt like half of them were packed into the small, corrugated-iron shack.

I finally fell out of the door at 6am, surely deserving a medal for keeping up with the crazy Icelanders, before crashing out in my plush room at the Hilton Reykjavik Nordica, with its sleek, minimalist décor.

After a night like that the only way to clear a sore head is to indulge in one of the world's great natural spas.

Lounging in the milky, geothermal water of the Blue Lagoon, just half an hour's drive from the city centre, saw off my hangover in record time.
 
With parts of the huge open-air pool reaching around 40C it provides the perfect balance to the ground temperature of 4C.

As my headache receded and I floated on my back in the healing water beneath a cloudless sky, I began to ponder the cosmic fireworks that were taking place overhead but were invisible in the bright daylight.

I came to one conclusion about Iceland: it's magic.