PORTUGUESE OUTPOSTS: Round these parts, they fight battles with coconuts

Founded by the Dutch and rescued by the Portugese, the twin towns of Recife and Olinda keep themselves in shape with sibling rivalry.

BRAZIL HAS had some narrow escapes. Next month it starts celebrating the 500th anniversary of its discovery by Europeans, and historically minded Brazilians will be giving thanks that their country stayed a Portuguese- speaking land. It did not fall, for instance, to the Huguenots who took possession of Rio de Janeiro in the 16th century, hoping to transform Brazil into la France antarctique. Nor, which would perhaps have been worse, did it fall to the Dutch who wanted to make Recife and Olinda a colony of Amsterdam in the 17th century. With all respect to my friends in the Netherlands, I thank God the Portuguese got the Hollanders out of the north-east coast of Brazil in 1654.

Had things gone the other way there might have been windmills and narrow houses in Olinda, and no better cheese to eat in the hotels of its twin city Recife than ghastly Edam or Gouda. As it was, the Dutch invaders were put to flight and today the twin towns are two of the most atmospheric places in tropical Brazil, each with palm-fringed beaches, each with its own style and culture.

As two of the first towns to be built by Europeans in the New World, they preserve the glories of the baroque and the rococo. Olinda, a Unesco world heritage site, peers lazily out to the ocean, a home to artists and sculptors; seven kilometres to the south, Recife is busy, crowded and jumping with commercial life.

Olinda was the first capital of Brazil and the chief town in Pernambuco, a region that became famous for its riches. Slaves produced enormous wealth for their masters from the sugar-cane fields and this money bought both architecture and art in exuberant quantities. But, these days its pretensions to running Brazil have long since faded, and Olinda dreams its life away, a backwater content with the sea and the sun, as well as coconuts that drop from the trees for locals to collect (when they can be bothered) and make into a sauce that turns clams into a dish fit for a viceroy.

The old palace of the viceroys now serves as the local government office. The Franciscan friars built their church not far away and filled it with altars and angels peeping out from twisted white columns which look as though they were made from local sugar. If you don't like your churches to look like something created by the hand of a demented confectioner then go to Sao Bento, to to Nossa Senhora das Neves, to Santa Teresa, to Nossa Senhora do Monte or to Sao Joao Batista dos Militares for something a little more architecturally sober.

Olinda's carnival is good too but if you miss it, you can come back for three nights of dancing in mid-March to celebrate Foundation Day.

The people of Olinda have never much liked the people of Recife. When the Dutch made their bid to conquer Brazil they laid waste Olinda on its hill and then set about knocking Recife, down by the waterside, into shape. They changed its name to Mauritsstad after the Prince of Nassau, and began building embankments and bridges across the River Beberibe, the River Pina and the River Capiberibe so that it would look a bit more like Amsterdam in the sun.

Fighting broke out between Olinda and Recife but its ferocity was mitigated by the fact that there wasn't much ammunition and the artillery men had no option but to use bricks and hard fruit. (You can get a very nasty bruise from a coconut fired with a good measure of gunpowder from a cannon.)

Today Recife, with 1,400,000 inhabitants, has more than three times Olinda's population and is far more important for everyone except artists and poets. Crowded on islands tightly packed with skyscrapers, the city is a Brazilian businessman's dream. Pavements in the centre are teeming with shoppers and salesmen all day. If there is little left of the buildings the Hollanders put up in the 17th century, there is a seriousness and urgency about the commerce which does justice to the memory of Prince Maurice of Nassau and recalls the old refrain:

In matters of commerce the fault of the Dutch,

Is giving too little and asking too much.

It's not difficult to get out of the crowded centre and down to Recife's beaches. Boa Viagem - Bon voyage in Portuguese - 10 minutes away by taxi, is to Recife what the Copacabana and Leblon are to Rio de Janeiro - 8km of sand that is overlooked by smart blocks of flats and bordered by hotels, restaurants, bars and cafes.

The Recife carnival is, as one would expect, a more high-powered affair than Olinda's, attracting visitors from all round Brazil as well as from abroad. If the Dutch had stayed there would have been no such annual jollifications in either city.

For travel after February, Journey Latin America (0208-747 3108) has fares from pounds 370 return from Heathrow to Recife via Brussels, on VASP.

In Recife the top place to stay is the Recife Palace (00 55 81 465 6688). In Olinda the B grade Pousada d'Olinda (00 55 81 439 1163) is recommended (10 per cent discount to those carrying the `South American Handbook'). Don't forget: hotel prices rocket during Carnival