Isles of light: Croatia's Dalmatian coast

Setting a course around Croatia's lesser-known islands, John Walsh makes a voyage of discovery – encountering beautiful surroundings, sheer luxury and overassertive locals

I am swimming in the eastern Adriatic, and heading straight for a sheer rock. The sun is scorchingly hot on my back but the waters around are choppy and argumentative, as if warning me against what I'm about to do. I wouldn't be doing it at all if I hadn't been talked into it by Matthew, the Croatian teenager with the Boris Becker eyelashes, whose boat has taken us around the perimeter of the island and whose passengers are now splashing in the sea.

Matthew gestures at the looming rocks. "You go first," he says. I look up and see that the rock face doesn't quite come down to the water; it stops two inches above it, and through this tiny natural window, I can see some spooky light. I'm not mad about swimming under the craggy guillotine above my head but I can't turn back now, so I swim low in the water, feel the rock blade parting my hair and... and suddenly I'm inside a brilliant cave, 30ft long and 20ft wide and it's like being in a Seventies disco. The sea bed is a fabulous, shining dance-floor (is it shining?) and some transformative alchemy has turned the water beneath us a pale Listerine blue. The swimmers in the cave look at each other's hands and legs and torsos glowing with UV rays, look down at their bodies and laugh with nervous delight.

Back at the Hotel Kolocep, Guy the manager explains how the sun's rays penetrate the tiny crack in the rock wall, hit the sandy seabed and are prismatically diffused upwards ("Like the cover of Dark Side of the Moon by Pink Floyd") to turn everything azure. But I remember it just as The Blue Cave Moment, one of a stack of epiphanic memories of the Dalmatian coast. Chief among them are the sunset across Lopud harbour, the sunset from the dining terrace of the Villa Ruza, the sunset on the yacht-strewn harbour of Cavtat, the pulley-borne cocktails on the Korcula battlements, the weirdly alcoholic local wine-tasting at the Villa Vilina, the mussels pulled straight from the sea in Kobas Bay, the ubiquitous genre paintings in several ancient churches of the Virgin Mary hovering above the mouth of hell, and the al fresco performance, beside St Blaise's Cathedral in Dubrovnik Old Town, of Aram Khachaturian's "Sabre Dance" by a street band on guitar, fiddle, clarinet and a double rack of half-full Absolut vodka bottles.

Oh, and the attitude of the girls. Croatian waitresses and shop girls display a stroppy exasperation with tourists, as if keen to remind you that they're nobody's slave. I was looking at some wood carvings in a beachside shop when the girl at the counter indicated more carvings in a glass case. "Mabe these?" she said. I didn't understand, and didn't reply. A minute later, I said, "What I'm looking for – sorry, do you speak English?" Her lip curled. "I just spoke to you in Eenglish!" she said in a sudden fury. "Din you notice?" Local tourist-info people explain that the girls haven't yet learned the arts of hospitality. But their Slavic directness is certainly exhilarating.

Before the vicious civil war tore the federation of Serbs, Croats, Bosnians and Slovenes apart, more than a million of us holidayed in Yugoslavia every year – the vast majority on the coast of what is now the independent nation of Croatia. Marshal Tito, the Communist dictator, was keen on one-size-fits-all package-deal holidays, as we shall see. But when peace finally returned to the region after 1995, a new sophistication began to bloom on the Dalmatian coast.

From the barren triangle of Istria, all the way 2,000km south to Dubrovnik on the edge of Montenegro, this is a territory that's gradually been coaxed into becoming a holiday paradise. You won't see much trace of bombing raids, sieges or political posters in these picture-perfect islands (1,200 of them, mostly uninhabited), but you'll find a lot of modern hospitality on them.

The most popular are in the sea around Split. Any TV-addicted Croatian will tell you that the only place for celebrities to go for posing and party-going is Hvar – specifically, the Adriana hotel and the achingly trendy Carpe Diem nightclub. Hvar, Brac and Vis form a natural trilogy as the Groovy Islands. Me, I was in search of the lesser-known, or less-developed, islands further south. A company called Hidden Croatia offers to take you to the more unspoilt regions of the Dalmatian littoral, secret hideaways and private crannies, places where Lonely Planet's Croatia guide is a thing of novelty and wonder, where local islanders know nothing of Magnum ice-creams and souvenir dolls in national costume.

You land in Dubrovnik, two-and-a-half hours out of Gatwick, then a two-hour taxi ride scoots you down the long, sliver-thin Peljesac peninsula that sticks out from the mainland like a rude natural phenomenon. It's a lovely ride, on which you note how green the place is – unlike many Greek and Italian islands, Croatian isles seem to burst with foliage and leafy bowers. They don't seem to suffer that heat-bewildered starkness of the Med in July. And the coastline looks as though it's been tidied up, its loose edges and eroded hemlines tucked away and stitched in. It looks, if anything, a little too perfect.

Soon you're on the 20-minute ferry to Korcula, an island with a lovely medieval town where, if you believe local spin, Marco Polo was born in 1254. The island is known as Kerkyra Melaina or "Black Corfu" because it's stuffed with olive groves and pine forests, but it's a lot more beautiful than the Greek tourist trap. It is, however, pretty stiff with tourists, hanging out in waterside bars until late, or taking breakfast by the sea wall, as the loudspeakers in the trees overhead play "El Condor Pasa".

A vast, imposing Land Gate (Kopnena Vrata) leads you up steps to the Revelin Tower, through which you're transported to the Middle Ages. If you feel you've just stepped into back-street Venice, it's hardly surprising: the Revelin Tower bears the Venetian coat of arms. The gate was built to celebrate the island's successful defence against the Ottoman navy in the battle of Lepanto in 1571, as celebrated by G K Chesterton's great poem: "They have dared the white republics up the capes of Italy / They have dashed the Adriatic round the Lion of the Sea."

Escaping from the late-night market stalls, you can find yourself in a courtyard watching 20 local men in bright Ruritanian garb (half in red and white, half in black and white, accessorised with plumed headgear) squaring up to each other. Each man wields two short swords and, after some argy-bargy about which king has exclusive grazing rights to a fainting damsel, they start to fight. This is the Moreska, the Korculan sword dance which has celebrated the Lepanto victory annually for 440 years.

The initial dance-steps of the two kings irresistibly remind one of the Fish-Slapping Dance in Monty Python, circa 1972. But as the choreography of sword-clashing speeds up, encouraged by a noisy brass band on the parapet, and real sparks are struck, it's pretty impressive.

There's only one hotel in the Old Town, the Hotel Korcula (the first to be built on the island, in 1912.) It's flyblown, but undoubtedly impressive, with a windswept terrace that overlooks the bay. Visitors with more avant-garde tastes should check out the Lesic-Dimitri Palace, not so much a hotel as an experience in spatial surrealism. It's a complex of six large, one- and two-storey buildings on either side of an alley running from the town centre down to the sea. The buildings date back to the 15th and 16th centuries and have been extended by successive generations ever since.

They were bought in 2000 by an enterprising Englishman, Michael Unsworth, and reinvented as dramatically luxurious suites. They all feature three or four bedrooms, but the décor in each is wildly different. One suite features a thrillingly ancient dining-room with original stone sinks and windows. Another sports a massive dining table with surreally high-backed chairs and crazily proportioned sofas. The balcony overlooks both sunset and sea, though you have to squint down a narrow corridor to see them.

The manager, Toni Lozica, is a bit of an installation himself: 6ft 6in of bearded, long-haired SlavicV C machismo, an opera singer ("Bryn Terfel? I am always being confused with him. Luckily, he is good friend") and mariachi band member, he is Korculani born and bred, with all the islander pride and breezy arrogance that implies. A word from his lips, a microscopic lift of his bristling eyebrow and people spring into action: deals are made, taxis are ordered, tables are booked, boats are hired and (I'm guessing here) unwelcome strangers are pulled into dark alleys and garrotted. He steered us towards the most appealing sandy beach on the island, the Vela Przina in Lumbarda, 6km from Korcula town; and towards a terrific restaurant called Mate's (or "Matthew's") in the village of Pupnat, where lunch goes on all afternoon.

You start with fennel-infused grappa, and a mixed plate of smoked prosciutto, goat's cheese, marinated aubergines and crab pâté, move on to the omelette with ham and asparagus, then some simple pasta then, climactically, peceno meso or grilled meat – a huge plate of delicious lamb cutlets. Eating out here doesn't come cheap: the fresh meat and fish cost 250 kuna (about £35) per kilo. And it's a shock to find the local wine costs the same as posh Burgundy in London restaurants. Although the big Croatian reds, Postup and Dignac, are made only a couple of miles away on the Pelisac peninsula (you can practically see the vineyards from your table), they're produced in such small quantities that they can justify charging 200 kuna (£27) a bottle in bars and restaurants. Delicious too, if oddly redolent of both Cherry Cola and Fry's Turkish Delight.

There's not much nightlife on the island, except for hopping between the several Old Town bars and climbing the ladders up to the battlements of the Massimo cocktail bar, where we sat among shrieky young Irish girls on a hen party, as the waiter took our orders and pulled up the ensuing cocktails in a bucket on the end of a rope.

Most visitors stay on Korcula three days or so, before exploring other islands. Hidden Croatia will fix you up with an itinerary of places to visit, ferrying you there by "Rib" – an inflatable tender that whizzes along the Adriatic like a speedboat. From the main peninsula, they'll take you to hidden-away restaurants, such as Luka's in tiny Kobas Bay, a simple father-son operation of immense charm, where they hoick oysters and mussels out of the sea beside you, before carpet-bombing you with shellfish, whitebait and beautifully smoked (and apparently quite sustainable) tuna. Or they'll move you on down to the must-see Elafiti Islands near Dubrovnik.

These are being industriously marketed as hidden jewels of Dalmatia: free of cars, lush with vegetation, fragrant with herbs, packed with swimming opportunities and ripe for tourist development. The three largest are Lopud, Sipan and Kolocep, names that would be at home in a Yugoslav folk-tale or a pantheon of Babylonian gods. In the 15th and 16th centuries they were used as second homes and summer villas by Dubrovnik aristocrats – who, along with building terracotta-roofed houses, built several chapels. Franciscan monks who lived there used to gather herbs and simples to be used in curing illnesses.

The smallest island, Kolocep, has a tiny population of 125 islanders (astonishingly, there were once 700 families here, when Kolocep was a force in medieval boat-building). Plans are afoot to halt the inevitable dwindling process.

The island is dominated by the sprawling white Hotel Villas Kolocep, built in the 1970s as part of an experiment in tourism by Marshall Tito. It takes a moment to get over the shock of its Soviet-style regimentation, where the identical rooms are located in severe blocks (shades of Prisoner Cell Block H) on municipal staircases, where every room has its own democratically identical balcony overlooking the yachts in the bay and most meals are help-yourself-comrade buffets.

Gradually you succumb to the island's charm, the lush palm trees, the orange and olive bushes, the swimming holes (like the Blue Cave) and the air of relaxed, unhurried, car-free dolce far niente.

The Foundation, an alliance of Croatian entrepreneurs and the hotel's management, is trying to extend the present tourist season by proposing Kolocep as "The Island of Knowledge": a location for academic conferences in April and October. It's easy to imagine the bio-engineering faculty at Oxford or Sussex deciding to switch their usual conference venue from Bournemouth or Birmingham to Kolocep, with its blue Adriatic waters and the sunsets at the Villa Ruza restaurant.

Lopud, big sister island to Kolocep, features another Tito-period monstrosity, the Hotel Lafodia – a white Copacabana-style complex with a brown slurry of soil splitting it down the middle. It's currently out of action, awaiting renovation. If you can ignore it, the view around the rest of the harbour is sensational. Book a table at the Villa Vilina, an elegant throwback to the 1930s; its rooms may be sparsely furnished but the view from the terrace restaurant is spectacular, the chef is a genius at black pasta with prawns, and the steaks are colossal.

Nearby is a 15th-century Franciscan monastery, whose bell tolls with annoying insistence at 6am every morning – and a second bell tolls three minutes later, like a medieval snooze alarm. The monastery is ruined now, but great things are in store for it: Francesca von Hapsburg, the archduchess of Austria, has bought up the arcaded courtyard and is confidently expected to tart it up. Her family has commissioned a light installation called Your Black Horizon by Olafur Eliasson, whose exhibit of a vast orange sun was a big hit at the Turbine Hall of Tate Modern some years ago. It's in a small gallery in a small field.

You somehow know Lopud will be called "The Island of Art", to match the Island of Knowledge next door. For this trip I was content that it was the Island of the Gorgeous Beach: another sandy one, called Sunj, 20 minutes' walk from Lopud harbour, it has a very jolly bar featuring hot dogs, beer, 1950s rock'n'roll and a cruelly beautiful waitress with a wonderfully disgusted manner.

Our last destination was Cavtat, a former fishing village that's become an overstuffed tourist venue, where wide-arsed, chrome-trimmed yachts bob at the seafront promenade and there are several hundred white sun-loungers as far as the eye can see. It's got a lovely restaurant, though, in the Dalmacija, whose tables and umbrellas spill into the square, and whose presiding spirit is Tino Pattiera the great opera singer, who grew up in the house beside the restaurant, now the Hotel Pattiera.

As the maître d' brings you pasta of unearthly lightness, scallops and Mediterranean langoustines and a tiramisu that would make the angels weep, and the moon enters the palm tree on your left, the metal wires on the yachts make their curious slapping sound and a little breeze from the harbour stirs the hairs on your newly swarthy arms, and the maître d's wife comes out to explain exactly how she did the piquant sauce, you have to conclude that Croatia in 2009 has something – it's like discovering Italian coastal resorts about 25 years ago, before they were overrun with grot.

The Dalmatian coast and its necklace of islands is a lovely reminder of what the Mediterranean used to be: green and cute, ice- clear and sky-blue, unspoilt and unselfconscious; and full of cruelly beautiful women.

Traveller's guide

Getting there

The writer travelled with Hidden Croatia (0800 021 7750; hiddencroatia.com), which offers seven nights at the Hotel Villas Kolocep from £490 per person or seven nights at the Hotel Villa Vilina on Lopud from £593. Prices includes Monarch charter flights from Gatwick to Dubrovnik, transfers and B&B.

For independent travellers, the most convenient airport for the region is Dubrovnik, served by BA (0844 493 0787; ba.com), Croatia Airlines (0870 4100 310; croatiaairlines.com) and easyJet (0905 821 0905; easyJet.com) from Gatwick; easyJet also flies from Liverpool. Jet2 (0871 226 1737; jet2.com) flies from Leeds/Bradford and Belfast; Flybe (0871 700 2000; flybe.com) from Birmingham, Southampton and Exeter; and Flyglobespan (0870 556 1522; flyglobespan.com) from Edinburgh.

To reduce the impact on the environment, buy an "offset" through Abta (020-3117 0500; www.reducemyfootprint.travel).

Staying there

Lesic Dimitri Palace, Don Pavla Pose 1-6, Korcula (00 385 20 715 560; lesic-dimitri.com). Suites start at €195, room only.

Eating & drinking there

Mate's Restaurant, Pupnat, Korcula (00 385 20 717 109).

Restaurant Dalmacija, Trumbicev put 9, Cavtat (00 385 20 478 800; villa-pattiera.hr).

Carpe Diem, Hvar ( carpe-diem-hvar.com).

Visiting there

Hidden Croatia Marine ( hiddencroatiamarine.com) offers private boat excursions to Villa Ruza from 380 kuna (£45) per person.

More information

Croatian National Tourist Board: 020-8563 7979; gb.croatia.hr.