Old Favourite: New Wave Watergate Bay

A Jamie Oliver restaurant, an academy for extreme sports... Alex Wade visits Watergate Bay, where family holidays are moving upmarket

A crowd of del- ighted parents stands at the water's edge, under bright blue skies, warmed by the early morning sun. Sets of immaculate turquoise waves are breaking some way from the shore, sending lines of white water to the beach. Not more than 20m from their parents, and under the watchful gaze of three surf school instructors, children aged six to 12 are learning to surf on soft, foam boards. In the distance, a surfer in his 20s casually flies off the lip of a curling wave, while on the sand two women are learning how to handle power kites.

But no, this is not Hawaii. Nor is it Australia or California. It is Watergate Bay in Cornwall, a place set to become one of Europe's holiday favourites. The county has long been the destination of choice for many British families. Cornwall has everything: wide expanses of sandy beaches, hidden coves, rugged cliffs, wild moorland and a climate so temperate that palm trees are common. Picture-postcard communities such as St Ives, Fowey and Charles- town have been tourist magnets since Victorian times, while those who seek space and solitude can find themselves alone on the coast path within a few strides of a village. The British have tended to take all this for granted, but recently Cornwall has been moving up a gear.

Its transition from quint- essential British summer favourite to European must-see hotspot is nowhere better illustrated than at The Hotel and Extreme Academy, Watergate Bay. "We've gone through a huge transformation from traditional British three-star hotel to a vibrant year-round destination in keeping with the modern Cornish environment," says Will Ashworth, the hotel's managing director. "There are tremendous developments in the offing that will maintain the momentum."

One of those developments is the opening, in May, of Fifteen Cornwall, a restaurant inspired by the Channel 4 TV show Jamie's Kitchen. The show followed Jamie Oliver's attempts to create a restaurant run by young people from disadvantaged backgrounds, and spawned the popular London eaterie Fifteen. Amsterdam acquired its own Fifteen in 2004, and now Oliver's vision is heading to Cornwall. "All the funding is in place, and we start work on 3 January," says Ashworth. "By May people will be able to enjoy a world-class dining experience overlooking two miles of stunning beach."

Fifteen Cornwall will occupy the first floor of the Extreme Academy, set up by Ashworth's brother, Henry, and located a stone's throw from the revamped Watergate Bay Hotel. Henry Ashworth's dream was simple, if ambitious: to create a ski resort on a beach. The Ashworth brothers formally merged the Academy and hotel businesses in March last year, and the impending arrival of Fifteen Cornwall seems certain to bring Henry's original vision yet closer to reality. Visitors will be able to enjoy any number of adrenaline sports - surfing, kitesurfing, wave-ski riding, mountain boarding and traction kiting - and then indulge in après-surf relaxation.

Fifteen Cornwall retains its founder's ideals. "It's been set up to provide a means of access for young people to the one part of the Cornish economy that is going from strength to strength - leisure and tourism," says Will Ashworth.

The new restaurant will also help two Cornish industries that have suffered in recent years: fishing and farming. Ashworth expects that more than 90 per cent of the produce that Fifteen uses will be local. Nearby sights include the Tate St Ives, the Eden Project near St Austell, Rick Stein's Padstow restaurants and any number of natural wonders, such as Bedruthan Steps, Gurnards Head and Kynance Cove. But perhaps the key to Cornwall's success is the sport that now draws enthusiasts to the sea all year round: surfing.

The "sport of kings", as it was called by the Hawaiians, is booming. As Will Ashworth puts it: "The increase in the popularity of surfing is staggering. Our Surf School teaches five times as many students as it did 10 years ago and the proportion of female surfers has risen from 10 per cent to 40 per cent. In the summer there can be 250 surfers in the water at one time."

Sometimes this means that long-time surfers bemoan the crowds, but Cornwall is a sizeable county, and intermediate to expert surfers can usually find somewhere to surf. Moreover, the Cornish are not blind to the very tangible financial impact that the rise and rise of surfing has had on their county, in the form of a cool £42m a year.

The Hotel and Extreme Academy, Watergate Bay, caters amply for aspirant surfers. Packages can include free surfing lessons and this spring sees the opening of a new surfing academy run by surf-wear company O'Neill. Those not smitten by the bug can try their hand at other sports, hike along the cliffs or enjoy the laid-back atmosphere. There are heated pools, early meals for children and a baby-listening service. The family pet can travel, too: Watergate Bay is one of Cornwall's few dog-friendly beaches.

There is also a locals' surf club, as befits a beach that in 1957 hosted the British and European Surfing Championships. Back then, surfing was a little-known pursuit in the UK, and few would have predicted the emergence of the family-friendly enterprise at Watergate Bay that is capitalising on its popularity. But each of the parents and children on the beach last summer came away with smiles as gleaming as the sunlight on the waves. They were, as surfers put it, stoked.

The Hotel and Extreme Academy, Watergate Bay, (01637 860543 www.watergatebayhotel.co.uk).

Our favourite seaside holiday

For a seaside family holiday with style, we recommend Moonfleet Manor in Dorset. A sister hotel of Woolley Grange, this fabulous rambling Georgian house is set just behind Chesil beach, one of Britain's most beautiful stretches of sand. As well as its perfect positioning for shoreline frolics, the hotel offers kids a supervised den and indoor and outdoor play areas, while mum and dad can make the most of spa treatments and the gourmet restaurant. Moonfleet Manor (01305 786948; moonfleetmanor.com) offers family rooms from £180 per night for dinner bed and breakfast.