The Jewels in the Crown

For a few rupees more - Ancient meets modern in Rajasthan where, in a crumbling landscape, the old palaces have become hotels, reinventing their elegant past for the tourists. But can history compete with the modern luxury of the international invaders

''You see the dancing peacocks?" asked my guide. "Symbol of prosperity. India's national bird, you know." His ruby-and-diamond earrings winked in the sunlight. "And you see the trellis pattern over this gate? Symbol of welcome. And you see figure of Ganesh? Symbol of good luck."

''You see the dancing peacocks?" asked my guide. "Symbol of prosperity. India's national bird, you know." His ruby-and-diamond earrings winked in the sunlight. "And you see the trellis pattern over this gate? Symbol of welcome. And you see figure of Ganesh? Symbol of good luck."

"What about the back-to-front swastika?" I asked. "What's that a symbol of?"

"Is Hindu symbol for peace," said my guide, vaguely. "Very holy thing."

We moved on, swiftly. No breath of contention may disturb the haze of welcome that hangs over the entrance to the 12th-century Jaisalmer Fort in the extreme western reaches of Rajasthan. Even though the welcome is a little desperate, and the local prosperity alarmingly dependent on a nosediving tourist economy.

We moved on, through the magnificent Sun Gate. "You see how the road doubles back?" said the man with the Shirley Bassey bijoux. We moved past a gaggle of carnival barkers selling multicoloured Rajasthani bedspreads. "Now we are going through Wind Gate," said the guide. "You see sharp bend? Why you think this is?"

"I've no idea," I said.

"Is because of drunken elephants."

"Come again?"

"When fort was under siege, invaders used to feed elephants whisky, so they would batter their heads against gates and knock them down. But when elephants come face to face with these sharp turns, they cannot manage them."

"Let me get this straight," I said, "The fort was saved from ruin because the original architect had the sense to put in some hairpin bends, to bewilder alcohol-crazed mammoths?"

"Exactly," said the guide.

You can never be absolutely certain that you're hearing the truth in Rajasthan. It's a Baron Münchausen land of epic stories, vast riches, earth-shaking battles, off-the-scale luxury, elephantine vainglory. And its relationship with modern tou-rism is as many-faceted as the lingam of Shiva, a kind of divine black phallus whose several faces are washed with milk, yoghurt, ghee, honey and sugar (and the resulting mixture scooped up from the guttering and drunk with relish by believers) in a bewildering Hindu ceremony.

They're frightful show-offs, the Rajasthanis, but they've a lot to be conceited about. Their state used to be Rajputana, or "Land of the Rajputs", who are one of the old castes of Indian society. Rajan means a king and putra a son, and every modern Rajput imagines himself descended from ancient royalty. His ancestors ran the state for a thousand years, until they were ousted by the Mughal emperors.

When the Raj took over, the Rajasthani rulers made a deal with the British; they kept their independent states, each with its ruling maharaja, maharani, or maharawal, and their luxurious lifestyle. The colonising Brits were effectively indulging a ludicrously outdated feudal structure of aristocrats and peas- ants, harem-world luxury and yelping poverty. It could not last. When India won its independence in 1947, the maharajas were allowed to retain their titles and land, and be paid a modest civil-list income, but Mrs Gandhi put an end to all that in the 1970s. With no income, meaningless titles and a disastrous scaling-down of property ownership, the bejewelled élite hit hard times. Some were even reduced to throwing the doors of their palaces open as hotels.

The old Rajput vainglory hangs over every city in the state, lording it over the heat and dust in the streets, oblivious to the five-year drought that continues to blight small villages across the state. The Rajasthan palaces are wondrous to behold, whether they're 17th century (like the City Palace, Udaipur) or nearly new (like the Umaid Bhawan Palace in Jodhpur, completed in 1944); so are the havelis, or rich men's houses, with their filigree balconies and Delft tiles. But less than half a mile away, all is ruin: Third World poverty, mud and corrugated metal shacks.

So you must decide: do you want to visit this spectacular land as a Western fun-seeker, aloof from the street-level grot? Or as a Rajput warrior, who values authenticity above five-star style? This is the choice that fuels the current battle for the tourist soul in India, a battle between two commercial dynasties. The Taj chain has an enviable record of converting grand Indian palaces into graceful modern hotels – in Agra, Delhi, Jodhpur, Jaipur and (most spectacularly) the Taj Mahal Hotel, Mumbai. Rec-ently, they've had to face stiff competition from the exclusive Oberoi chain, which has provocatively opened a super-modern hotel on every site where the Taj once ruled the roost.

Take Udaipur, a crammed and bustling city where you can still see the remains of the city walls and the giant main gate that used (in living memory) to be locked at 6pm every day to keep strangers from corrupting the place. The centre is a lovely, complex maze of down-at-heel houses in a startling palette of peach and acid green, and a gorgeous market where the fruit-and-veg stalls, entirely female-run, are a Fauvist extravaganza of colour. But A-list travellers might never find this bustling charivari at all, because their eyes will be focused on the 16th-century dreamscape of Lake Pichola.

The City Palace is a huge, cream monstrosity that runs along the lake's shore like a great marble folly. Inside, everything breathes regality. The windows aren't just holes in the wall, they're beautiful frames for the views of lake and hillsides, deckle-edged in the Mughal style. The pillared courtyards (where the maharaja used to hold his durbar, or court) are breeze-capturing and cool, the old harem area claustrophobic, the royal apartments farcically populated with cardboard replicas of pre-Partition princelings.

Out in the middle of the lake, apparently floating on the calm water, lies the Lake Palace, a long, white, graceful Lego construction built in 1754 by the Maharaja Jagat Singh as his summer palace. Today, it's a hotel of matchless luxury, where you drink your sundowner in an alfresco bar of little islands dotted with fairy lights; where guests are ferried to and from the shore in elegant Cleopatran barges; where the morning sun bounces off the lake, cascades through the stained-glass bedroom window and dances all over the wall.

But a hated rival is about to come on stream – the stunning $40m Udaivilas Hotel from the Oberoi dream-factory, a gleaming city of a hotel with nine swimming-pools, a Xanadu-size waterfall running in ziggurat steps the whole length of the garden, a profusion of stylish rooms and a fully equipped spa. Unlike the local staff at the Lake Palace, its general manager is American, its head chef is French, and its masseuses are Thai. It opens this month, it's very expensive, and it's looking for equally glamorous guests – people who will put up with the backstreet smells and tat for maybe half an hour before being borne, perhaps by palanquin, back to their six-star designer Paradise.

The same rivalry between Taj and Oberoi, the same battle of History versus Modern Style, has spread right across the state and has now reached the ancient, beating, golden heart of Rajasthan – Jaisalmer.

You can see the spectacular outline of Jaisalmer Fort from a couple of miles away, after an epic, five-hour drive from the crazy bustle of Jodhpur into the Thar desert. The fort appears as a long, shimmering silhouette, a slumbering mirage. Closer up, it resolves into the world's most elaborate sandcastle perched on a hill, its 99 turrets joined together by walls made of soft limestone blocks held together by metal flanges. The city was on the southern Silk Route, and vast 2,000-strong caravans of merchants moved through it en route to Sind, Baluchistan, Kabul, Iran, Iraq and, finally, Istanbul, then the biggest trading centre in the world. Jaisalmer was the last-chance saloon for food, drink and entertainment before crossing the desert westwards.

Today, the Jaisalmer fort is perhaps the world's only still-inhabited, non-museum fort in which 2,780 people live and work. Within its walls, old and modern worlds collide. Its ancient streets are so narrow, the upper balconies lean across and kiss each other. Open drains, 12th-century style, struggle to cope with the excesses of the modern world.

The minute you enter the fort, you're hassled by vendors, importunate guides and elegant madwomen in crimson saris who try to flog you bright silver gewgaws. And, just as you're absorbing the fact that you're gazing at a lifestyle largely unchanged since the Dark Ages, you turn a corner and encounter a sign saying: "Trotters Independent Travels. We organise camel and jeep safari to the desert..."

There are dozens of little hotels inside the fort itself, with rooms going for around 200 rupees (£2.90) a night and rising smartly to 1,400 rupees (£20) for air-cooled rooms in former palaces (try the small, pretty and very reasonably priced Hotel Killa Bhawan, tel: 00 91 2992 51204). But the future action is outside the fort, indeed 5km out of town, where a luxury hotel complex has been spreading itself across several acres of zoned land. Both the Taj and Oberoi chains have bought sites here – but before building anything, they're waiting to see the fate of the key establishment in these parts – Fort Rajwada, a massive, kitschy explosion of colour and light, opulently accessorised with 400-year-old balconies and ancient gates retrieved from the salvage yards of Indian history. It's no big surprise to learn that the decor was masterminded by a German opera-designer called Stephanie Engeln. It's bizarre to find such a burst of European avant-gardism in the middle of the Thar desert. On the terrace, you can eat chicken tikka snacks and try the not-unbearable Indian white wine called Riviera (but don't, on pain of death, touch the red) while businesslike, horny-handed Nautch girls in tribal frocks whirl around you.

It's gorgeous, but is it enough? As the India tourist industry regroups itself after the shock waves of September 11, the Gujurat riots, the Kashmiri disputes, the temple shootings, and the far-off threat of war with Pakistan – not to mention the unhelpfulness of the British Foreign Office, which continues to warn would-be travellers to India that their safety may be in jeopardy – it remains to be seen what "the Rajasthan experience" will now mean: will it be to bask in the courtly grandeur of Rajput palaces, or aim for the super-modern luxury of the Oberois, the Mandarins and the other international invaders? Personally, I'm right there in the past, true or fictional, back with the dancing peacocks and the intoxicated elephants.

Travellers' Guide

Getting to Rajasthan: non-stop flights from London to Delhi are operated by Air India, British Airways and Virgin Atlantic. Fares booked through discount agents are about £500 return; you can get better bargains through discount agents on carriers such as Air France, Lufthansa and Emirates via other European and Middle Eastern cities.

From Delhi, there are frequent, low-cost trains to Udaipur, Jodhpur and other destinations in Rajasthan.

John Walsh's visit to India was arranged by Greaves

Travel (020-7487 9111; www.greavesindia.com). A similar nine-day/eight-night itinerary currently costs from £1,595 per person, based on two people sharing.

Visas: British passport holders require a visa to visit India. The standard tourist visa costs £30, valid for six months from the date of issue. First, get an application form via faxback from 0906 844 4543; through the website www.hcilondon.org; or by sending an SAE to the Visa Section of the High Commission of India, India House, Aldwych, London WC2B 4NA.