Nostalgia. It hasn't changed a bit

Valparaiso is the stuff of sea shanties. Christian Walsh reports

A cavalcade of sailors, pirates, poets and artists have been entranced by Valparaiso, comparing it to Europe's finest trading posts and cultural capitals. What this ramshackle port has in common with Venice and Florence has nothing to do with fine architecture – most of the buildings are humble corrugated iron shacks – or glamorous lifestyles, as the population are largely employed as sailors and dockhands. Valparaiso is, in the Chilean author Salvador Reyes's words, "La Puerto de Nostalgia".

Sounds of the past and present echo off the turquoise, vermilion and mustard shacks that spill down the encircling hills towards the harbour; a woman standing on an ancient, wonky balcony shouting to her neighbour over a chasm-like alleyway; a ship's doleful horn blasting across the city, the prow so close to the main plaza that it appears to touch the guttering of the post office. Archaic, rumbling funiculars carry schoolchildren from the port to the suburbs and deliver residents laden with shopping to their homes. Nostalgia, homesickness, longing and loss are the emotions that colour a sailor's life and seep into the stonework of ports everywhere – and Valparaiso in particular.

Reyes chose the word "puerto" carefully. It means both "port" and "door", because Valparaiso is the door to Chile's past and to its identity. Just 140km east of the city, American diners and shopping malls are crowding-out the capital, Santiago.

It was through this "puerto" that the world came to Chile on trading boats bound for the west coast of the New World and to the Spice Islands in the Pacific. Any ship rounding the horn set a course straight for Valparaiso. Then the city went from boom to bust almost overnight when, in 1914, the Panama Canal was opened, enabling ships to bypass this southernmost part of the world. But even if the handsome colonial buildings are crumbling, Valparaiso still has great regional importance, and the fact that the city is so vibrant and "lived-in", makes it worthy of comparisons with other decaying seaside cities such as Marseille, Havana or Tangier.

Valparaiso is a working port, not a tourist resort, and it has few important "sights"; the essence of the city being in the street. However, the citizens were keen to direct me to the neoclassical Iglesia La Matriz where I stood unnoticed while women prayed intensely to a gruesome wooden effigy of Christ in agony. The effigy is believed to have performed many miracles and pilgrims travel from miles around to adorn the neighbouring walls with handwritten messages of thanks for prayers answered.

Valparaiso is a city that inspires fierce passion as well as nostalgia. In the evening we walked around the barrio Puerto, an insalubrious jumble of alleys where you can hear melancholy boleros being sung in bars. In the Fifties and Sixties the city acquired a reputation as a bohemian enclave. Artists still idealise Valparaiso's earthy character; the sinuous back streets punctured by sailors' drinking holes and street-corner pirates trading in black-market goods. Pablo Neruda and Gabriela Mistral, Chile's two Nobel Prize-winning poets, kept houses in the city. Neruda would serve his guests cocktails as they sat in a grounded wooden boat high on the hills overlooking the port. He was terrified of the sea.

We were welcomed into a shack with a bar made of driftwood. The room was overflowing with children, parents and grandparents who raised the roof with a chorus of "Goodbye, dear Santiago" and "The Lakes of Chile". They were dancing Chile's national dance, the cueca; the dance that Darwin and the crew of The Beagle would have watched when they anchored here in 1832. Cueca music is played on piano, guitar and accordion. The lyrics speak of a sailor's longing for his homeland. Violeta Parra, Chile's answer to Edith Piaf, popularised many of these chansons in the Fifties. Her son, Angel, has taken up the gauntlet with contemporary arrangements including "Valparaiso at Night".

"I feel your dancing steps

In the middle of the night

They run all along my body

And stir up my blood

ValparaÌso at night."

The haunting melody of the cueca hangs over the city like a mist rolling in from the harbour, a scene famously captured in Whistler's Crepuscule in Flesh Colour and Green. As then, so now: for Europeans, Valparaiso is a paradox; a city both familiar and foreign.

There are no direct flights from London to Santiago. Iberia flies via Madrid for around £500. Brazilian airline, Varig, offers similar prices, with a stopover in Sao Paulo. Air France flies via Paris for around £600. Private buses to the city leave Santiago every 10 minutes. The journey takes 90 minutes and costs around 4,500 pesos (£5). In central Valparaiso, I stayed at the understated but quite grand Hotel Casa Baska (00 56 32 234036). Doubles start from 35,500 pesos (£30) per night.