Ibiza rocks: There's a new sound on the Med's party island and it's all about boys with guitars

The sun set hours ago and now six-foot transvestites, bikini-clad brunettes, good-time guys and club kids are getting down to the serious business of having a wild night out on the white isle. A typical evening's entertainment in Ibiza? Things are not what they seem. Instead of the thumping beats of funky house filling the air, it's the sound of an electric guitar that is getting people to their feet. And the dance floor isn't covered by the dripping ceiling of a packed nightclub; it's open to the stars. The biggest shock of all is that in the home of dance music, these party-goers are dancing to Britpop. This isn't just another club night – it's Ibiza Rocks, a summer-long outdoor music festival where beats and bass are swapped for bands and boys on guitar.

Now in its third year, Ibiza Rocks is the brainchild of one the island's biggest nightclubs. Manumission has been offering hedonists the ultimate night out for the past 14 years, with superstar DJs and live sex shows to bring in the punters. While you might think that indie rock was anathema to this bastion of dance music, the opposite is in fact the case.

"We started moving into live music about five years ago, when we booked Har Mar Superstar as a performer," says Andy McKay, the man at Manumission who came up with the idea of Ibiza Rocks. "For Manumission's 10th birthday we had LCD Soundsystem, and Fischerspooner did a residency a couple of years ago." It seems that this gradual process saw the birth of a new Balearic music scene. "We were slowly experimenting with more live music but we got to the stage where we really started wanting to push the guitar music." What did the island's diehards think about this volte-face? "Year one, it was a very tough sell. The Kaiser Chiefs sold out but most of these bands – Maximo Park, Futureheads, Hard Fi, The Kooks – were bands that people didn't know. We had a hard time selling tickets – it was a challenge."

Despite the early difficulties, Ibiza Rocks is now considered to be one of the festival season's hottest tickets. "It's become attached to the calendar pretty quickly," says Paul Rees, editor of Q magazine. "I remember the first year. A big fuss was made about the fact that indie and guitar music had invaded the dance hinterlands but it's superseded that now." Rees reckons that booking guitar gigs on Ibiza is just another example of the symbiotic relationship between dance and indie. "Dance music and indie crossing over has always happened. After all, rock bands like to think they sound great in clubs and DJs like to think they're rock stars." And it seems that those rock bands are having every bit as much fun as the people who've come to see them play at intimate Ibizan gigs.

"The thing that people miss," says McKay, "is that it's not just the punters that get this amazing experience – it's also the bands. Mark Ronson played last week and he said it was the best gig he'd ever done in his life." It's not just rock stars who are drawn to Ibiza Rocks. "Suddenly we're getting loads of celebrities and fashionistas down – the island's been invaded by skinny jeans."

More shocking even than the upsurge of constricting legwear and new Britpop bands is McKay's assertion that drugs, a regular feature of nightlife in Ibiza, may also be taking a back seat. "By changing the music you're changing the attitude and the behaviour of people," he says. "We're not getting any problems, we're not getting any fights and the audience is far less interested in drugs. Spending in our bars has gone up 25 per cent because I think people are choosing alcohol over chemicals." The other surprise is that thanks to the gigs, San Antonio, probably Ibiza's unloveliest spot thanks to high-rise apartment blocks and sunburnt Brits, is having something of a renaissance. "San Antonio has started to become the coolest place on the island," claims McKay. "It's funny – if you want to rub shoulders with Jade Jagger, you go there. We're really enjoying the fact that the town Ibiza Uncovered desecrated is now the town that is regenerating the island."

Coming up over the summer is a series of gigs set to make indie fans weak at the knees. Dirty Pretty Things, Kaiser Chiefs, Arctic Monkeys and the Fratellis are all booked to play and McKay says that he constantly has to turn down bands offering to play. "It's hilarious – we're at the point where we're getting very big acts coming to us and we're saying 'Can you just come back next year? We're so busy right now.'" Oversubscription aside, it's clear that Ibiza Rocks is here to stay. And thanks to the UK's less than impressive amount of sunshine this year, more people than ever are flocking to Ibiza's beaches and bars. "The weather in Ibiza can never be a disadvantage – you're guaranteed the sun's going to shine," says Rees. "I do think people will go regardless of what the weather's like there, but there are worse places to go and watch bands, aren't there?"

Ibiza Rocks runs until 11 September. Radio 1's Ibiza Weekend is on now. For tickets and additional information on the line-up, go to www.ibizarocks.com