THE VIBE
By day the world’s most northerly capital is serenely peaceful with its snow-capped mountain backdrop and candy-coloured corrugated iron-fronted houses, museums and galleries. By night this city by the sea explodes into life.

The good news is that following the banking crash it is no longer so eye-wateringly expensive to eat out or order a round of drinks, with prices in Reykjavík now on a par with London.

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THE HOTEL
I stayed at Hotel Plaza in Ingólfstorg Square in the heart of the city. The rooms are decorated in neutral tones with wooden floors, oak furniture and sleek modern bathrooms.

If you want to get a good night’s sleep ask for a room at the back of the hotel. Icelanders like to party all night.

WHERE TO EAT
Sjávargrillid (Skólavörðustíg 14) is a seafood grill that takes traditional Icelandic cuisine and adds a modern twist.
A smoked lamb carpaccio was followed by grilled char and plaice fillet. The rustic and homely decor features lots of driftwood and fishing nets.

A good place to drink is Kaffi barinn on Bergstadastraeti, a small unpretentious bar that shot to fame a few years ago after Blur frontman Damon Albarn invested in the place, which could explain the London Underground-style sign above the front door.

Opposite the harbour is the Bæjarins Beztu Pylsur, a tiny hotdog stand whose name translates as the “town’s best sausages”.
When former American President Bill Clinton came to town he stopped for a snack and declared the hotdogs so good that he returned for more during his next visit.

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DON’T MISS
Harpa, the new Reykjavík concert hall and conference centre has captured the essence of Iceland.
I attended a concert by German tenor Jonas Kaufmann who was accompanied by the Iceland Symphony Orchestra in the hall. Iceland’s otherworldly volcanic landscape of geysers, hot pools and lava fi elds is mind-blowing. The best way to experience it is with SuperJeep, which offers four-wheel-drive excursions.

My eight-hour Golden Circle tour included a visit to the Pingvellir National Park, once the home of the Althing, an open-air assembly representing the whole of Iceland which was established in 930 and continued to meet until 1798.

Now a Unesco World Heritage Site, it is also where the Eurasian and American tectonic plates meet.
The towering waters of Gullfoss (meaning golden falls) have to be seen to be believed while the geothermal valley of Haukadalur, which houses the infamous geysers, is also impressive. Other stop-offs include the extinct Kerið volcano crater and the Nesjavellir geothermal power plant.

BE PAMPERED
A visit to the Blue Lagoon geothermal spa is good for your skin and your soul. The warm waters are of a light blue hue and are rich in minerals, including silica and sulphur.

RETAIL THERAPY
If you want some independent boutiques, interior shops and accessories head to Reykjavík’s Laugavegur, Austurstraeti and Skolavoroustigur streets.
Check out Aurum (Bankastræti 4), a jewellery store full of creations by Guðbjörg Kristín Ingvarsdóttir, a local designer who takes her inspiration from nature.
Pop down to the Kolaportið Flea Market in the Old Harbour area at weekends for clothes, antiques, food and toys bargains.
To take home something truly Icelandic, try Kraum (Aðalstræti 10), a treasure trove of art and driftwood furniture created by Iceland’s designers and located in Reykjavík’s oldest house.

THE KNOWLEDGE
Hotel Plaza (dialling from the UK: 00354 595 8550/www.centerhotels.com) offers doubles from £106 per night (two sharing), B&B. Iceland Express (0118 321 8384/www.icelandexpress.com) has return flights from Gatwick to Reykjavik from £178. Blue Lagoon Geothermal Spa (420 8800/www.bluelagoon.com), admission £26, children free with an adult. SuperJeep (660 1499/www.superjeep.is) offers a Golden Circle excursion from £164pp. Visit Reykjavik: 590 1550/www.visitreykjavik.is; visit Iceland Tourist Board: 535 5500/www.visiticeland.com