Travel: Lisbon

Dilapidated and ramshackle it may be, but Portugal's capital is also strikingly elegant - and increasingly hip. Elizabeth Nash was hooked by its compelling charm

Lisbon extends a gentler hand than you might expect from a city that is both a European capital and a port. Within an hour, you find your pace dropping to an amble and your stressed-out features lifting into a contented smile.

It is a dilapidated, ramshackle and user-friendly city. People speak quietly. The streets, the trains, the tube and the clanking, wooden-slatted trams are full of people of all colours murmuring to each other, remonstrating mildly, exchanging languid greetings and farewells.

An exception was a splendid blowsy flower seller by the waterfront Cais do Sodre railway station - gateway to Cascais and Estoril just along the coast, the haunts of royal exiles and idle rich - who touted her scarlet carnations and crimson camellias in a voice with all the harmonious allure of a blowtorch. She made me jump out of my skin while I was quietly waiting for a bus, the most jarring note of the day.

I went to take a coffee at the marble bar of A Brasileira, the hangout for 19th-century poets, in the heart of the smart Chiado district. The area's refined fin-de-siecle air is finally re-emerging. For years it was shrouded by scaffolding while the damage of the 1988 fire was repaired. The pavements have been painstakingly repaved in mosaics of cream-and- black basalt. And behind a wriggly stucco facade glows a dazzling new jewel: Printemps, the French department store, five floors of hot fashion and cool design, a shopper's dream.

Little in this easy-going elegance prepares you for the fierce energy of Lisbon's night life. Forget the fado taverns, where tourists ranked elbow to elbow listen to mournful men and women plucking a guitar and singing as though they're gargling with warm treacle. Seek out instead the stiff Angolan rhythms and the broken shuffles from Cape Verde and Guinea-Bissau in the countless African nightclubs, a noble fall-out from decades of colonial wars. The Ritz, for example, on Rua da Gloria, which despite its fancy name is a former strip club whose decor, and possibly its staff, seem little changed in 60 years. There is something about the sticky carpeted descent down twin staircases (or was it done with mirrors?) and the shambling, snake-eyed waiters that speaks of generations of nameless sleaze. Or try Belize in the Bairro Alto, a former belle epoque palace occupied since about 1930 by a working men's sports club. It is a surreal combination. You cross a courtyard of breathtaking decadence, all flaking gilded plaster and ancient tiles, ascend an opulent marble staircase to a corridor studded with sepia prints of footballers in baggy shorts, pass a gigantic glass case jammed with generations of dusty silver trophies to where the action is: a softly lit ballroom, draped in plush, whose ceiling is a riot of crumbling frescos. The atmosphere is electric, with the band and the two-tone (or perhaps 15-tone) audience jumping the night away.

The Bairro Alto contains some of the sharpest gradients in this switchback of a city. You lean into narrow cobbled streets smoothed by the centuries and hike breathlessly up (or slither down) 45 degrees to the next bar. By day three your thighs scream in agony. Just remember to wear sturdy shoes.

Vertiginous Rua Diario do Noticias (literally "Daily News Street") is a reminder that this is the old printing quarter, now a melange of dubious dives and cutting-edge establishments such as Wig, a combined bar, dry cleaners and hairdressers. Racks of clothes hang in the window, hip Lisbon operators prop the bar and a young man holds up blond hairpieces which he and a Kate Moss look-alike scrutinise in a mirror.

The sweet-faced dreadlocked barman meanwhile warms me some brandy in honour of my once having visited his home town, Mueda, in northern Mozambique. Wasn't he homesick? "Oh yes," he says, and uses the favourite word in the Portuguese language. "The saudade is very painful." And he strikes his heart. But his unorthodox venture, opened only last autumn, is a success, and his wide smile belies his sentimental words.

Yet this is a city of sentimentality, so you might as well wallow in it. I took the Santa Justa lift, built in 1902 and immortalised in countless movies by romantic German directors, and walked the final stretch up the wrought-iron spiral staircase to a cafe surrounded by crates of oranges, where a notice promised (in English) "Suppers with Alive Music". A tape played an Edith Piaf lament and Mike Sarne's plaintive "Picture of You" - the perfect accompaniment. The city spread before me, and an arrow-straight boulevard dotted with statues, drew my eye towards the port.

This was where Vasco da Gama embarked on his passage to India half a millennium ago. In the pale afternoon sun, the estuary takes on a distinctive texture and colour, when the locals call it the Sea of Straw. Take the ferry across the river and look behind you for the best view of the city's startling profile.

Little fish restaurants await you on the other side. You watch as they fry your tuna steak and the water laps at your feet and you fling vinho verde down your throat. Gaze out west to where the pearly sea meets the pearly sky in a smudged horizon which continues all the way to American

British Airways (0345 222111) has a World Offer to Lisbon of pounds 151.40 midweek (pounds 10 more at weekends). This must be booked by 26 February for travel before 20 March. For more details about Lisbon contact the Portuguese Trade and Tourism Office, 22/25a Sackville Street, London W1X 1DE (0171- 494 1441).