Within half an hour of arriving in Iceland, we had seen three rainbows. We were well prepared for the ever-changing weather, the weirdness of the landscape and had even managed to pack our woollies though it was the end of August, but no-one had warned us how many rainbows we would see. Caused by the exceptionally clean air, ever-present atmospheric moisture and constantly changing weather, they were a daily sight during our two-week stay. Actually, nothing can really prepare you for Iceland. I had done my reading and thought I knew lots about Iceland. I knew that astronauts had trained for moon landings in the lava fields, and that it boasts Europe’s largest glacier and the site of the world’s oldest parliament, but the reality proved to be far and away weirder than this.

Reykjavík Our first stop was Reykjavík, possibly the hippest city in Europe and home to half of Iceland’s 250,000 population. Small and initially feeling rather provincial to a Londoner, it only took a walk around downtown streets Laugavegur and Hverfisgata to realise that Reykjavík deserves its current reputation. Shops displaying the most stylish of home-grown designs are filled with achingly fashionable young people, all displaying individual looks. Café culture is also thriving, with lots of coffee houses where you can dream a few hours away and watch the locals stream by. The city is dominated by the breast-shaped dome of the Elli?aár power station, generating the city’s hydroelectric power and responsible for the pungent smell of sulphur that pervades the bathroom every time you turn on the hot tap. But don’t let the smell put you off, this is some of the cleanest water in the world. In fact, 80 per cent of the country’s electricity is generated from the natural heat of hot springs, geysers and volcanoes, which means very little pollution of any kind. Reykjavík’s other landmarks include the harbour and the Tjörn, a sweet little lake where you can stroll, feed the ducks and admire old-fashioned Reykjavík architecture. At the northern end of the Tjörn is the impressive Rá?hús (the Town Hall), worth a visit for its huge relief map of the country and the glass-walled café perched over the lake. You can also pick up information on all the museums that are worth visiting and some background to the imposing Hallgrímskirkja, the modernist, grey-stone church that resembles a mountain of basaltic lava. You may well find it desolate (though some love it), but the views from Hallgrímskirkja’s tower are truly magnificent. Reykjavík’s biggest attraction, though, is the energy of its nightlife. Iceland is expensive, so Reykjavík’s hippest venues attract only those who can actually afford to go out. This tends to mean an older crowd, which can be refreshing, but ever since Blur’s Damon Albarn invested money in café/bar Kaffibarinn (1 Bergsta?astraeti), and the likes of Jarvis Cocker of Pulp were spotted partying through the night in Reykjavík, the city’s nightlife has achieved legendary status. During the week the bars are deserted but at weekends clubs open until 8am and are filled with some of the most beautiful people you will ever see. The most fashionable restaurant is the Conran-designed Rex (9 Austurstraeti) while Kaffi Thomsen (17 Hafnarstraeti), with its open brickwork and abstract murals, is also worth a visit. Iceland’s strict licensing laws and prohibitive alcohol prices have spawned a curious culture: people drink at home until 11 when they go out, already tipsy. And behind any club at night you will find gangs of sophisticated and gorgeous thirtysomethings guiltily swigging from an illicit flask of vodka.

The Blue Lagoon The perfect hangover cure is about half an hour outside the city, rising out of the lava fields: the Blue Lagoon. The huge futuristic building with its network of pipes belching out steam is the Svartsengi geothermal power plant; the creation of this plant resulted in the Blue Lagoon, a pool of naturally warm and mineral-rich seawater. The soft, milky, aquamarine colour comes from the blue-green algae that thrives in the lagoon and white Silica mud, which carpets the bottom with a light natural sediment. Floating in the milky water while it rains or snows has to be one of life’s true delights. By the side of the lagoon there are buckets of Silica mud which you can slap on and rub all over yourself. There is also a sauna in a huge, dark cave which you can squeeze into. It is hard to leave this place: there is no time limit on how long you can remain and it is easy to see how the people of Reykjavík get through the long dark winter months. But the Blue Lagoon is not just for pleasure: there is an outpatients clinic for sufferers of psoriasis and other skin ailments, and scores of people swear by the healing qualities of the waters here. And the rest... But it’s not just the Blue Lagoon; the air and water of the whole island is good for the skin, not to mention the soul. The wide untrampled spaces and the sense that the earth is bubbling with energy and activity has a primal effect on the spirit. If you are not already a hiking enthusiast, this country might make you one. It is hard to describe the remoteness of the countryside outside Reykjavík but below is a quick rundown of the best Iceland has to offer. If it is fjords you are after, then take in a tour of the west coast with its gorgeous beaches. For whale watching, the best areas are around the Reykjanes Peninsula (trips can be arranged easily from Reykjavík or in the north from Húsavík). The most common species are sperm, fin and minke whales. You can hardly avoid seeing dolphins if you go out to sea. Travel along the south coast from Reykjavík to take in Gullfoss, Geysir and Thingvellir. All are easily reached from Flúvir, where Icelandair have a beautifully-designed hotel. Seeing the much-photographed waterfalls of Gullfoss is really a humbling experience: the river drops a total of 32m in two falls through a 70m-deep canyon. It is a short drive from here to the site of the Great Geysir, which first started erupting in the 14th century and finally gave up early last century after years of tourists pouring soap powder in it to make it erupt. Luckily, it has a little stand-in: Stokkur spouts up to 20m of water every few minutes. The steam rising out of the ground accompanied by an occasional burst of water shooting into the sky is a magnificent sight. The trail is marked with many little bubbling and steaming vents, all with their own character and psychedelic colours. Next in this sightseeing triangle is Thingvellir National Park, site of the Althing (the world’s oldest parliament, dating from AD 930). Here, the rift between the North American and European tectonic plates is graphically illustrated by a steep cliff. As well as springs, streams and waterfalls, this beautiful area features Iceland’s largest lake and the Prime Minister’s summer house. Outstanding hiking can be had in the Landmannalaugar region in south central Iceland. The trek to Thorsmörk is the best walk in the country, lined with fantastically odd rhyolite peaks, coloured red, mustard yellow, green and blue, with steaming springs bubbling from them. The simplest walk takes about three hours and affords unparalleled views over multicoloured peaks and valleys and seven glaciers. When you come down, ease sore muscles in a pool serviced by a hot and a cold spring running down the mountain to make the perfect temperature. Don’t rush through this area, it is worth a week-long trip on its own. Further along the coast is the impressive Vatnajökul, the largest glacier in Europe which provides great glacier trekking opportunities. Skaftafellsjökull, one of the scores of ‘tongues’ off the main ice cap, comes within a mile of the Skaftafell National Park campground. Ask at the ranger’s hut on the campsite for details of the organised treks. If climbing on thousands of years’ worth of packed ice is not your cup of tea, then you can go out on skidoos.

Iceland’s only iceberg lagoon is nearby at Jökulsárlón, representing the traditional image of Iceland. Take a boat trip to marvel at the many colours frozen into the ice. Horse-riding is also a must, if only for the Icelandic pony itself. Import regulations mean the breed has remained unchanged since Viking times. These shaggy little creatures with their intelligent look and extra gait are a highlight of any trip there.

Most of the country’s geological features are in evidence up at Lake Myvatn in the northeast. The area has the island’s best weather and the turquoise lake teems with wildlife.

Iceland’s heritage is rich in history and myth, not least in the prolific medieval Icelandic Sagas. This intriguing culture has produced a thoroughly sophisticated people, in tune with the active natural world that surrounds them and living in an ecologically sensitive way that should be an inspiration to the world. A trip to Iceland will prove that earthly magic is still to be found in abundance, in the land of rainbows.

Practicalities

Airlines
Icelandair is the national carrier and flies 11 times a week from Heathrow to Keflavík. Prices start at £190. For information: T: 020 7874 1000; www.icelandair.co.uk

The Blue Lagoon
The Blue Lagoon is a half-hour drive from Reykjavík. There are regular bus services if you don’t have a car. T: 00 354 420 8800; F: 00 354 420 8801

Tours
Arctic Experience can organise a personalised itinerary that includes everything you might want to see or do. For information contact: T: 01737 218800; F: 01737 362341; www.arctic-experience.co.uk

Where to stay
In Reykjavík, the faded glamour of the Hotel Borg is unbeatable. T: 00 354 551 1440; Fax: 00 354 551 1420; www.hotelborg.is. In the rest of the country you can’t go wrong with Icelandair’s hotels which are well-designed and comfortable. For information: T: 020 7874 1000.

When to go
The summer months are the warmest – and lightest. Independence Day, celebrated on 17 June is a lot of fun. The winter months may boast the aurora borealis, but they are dark dark dark.

Information
Iceland Tourist Office can be contacted on:
T: 020 7388 4499; www.icetourist.is