Grenada is one of the Windward Islands. A little larger than the Isle of Wight, it lies at the bottom of the curve of Caribbean islands which stretch down from Cuba towards Venezuela. Visitors come mainly for the classic beaches (white sand, palms and coral reefs), but there are plenty of other attractions.
The capital, St George's, overlooks a natural harbour. With its whitewashed houses, wrought-iron balconies and red-tiled roofs, it has a distinctly Mediterranean feel. Steep, narrow streets lead past stone churches with stained-glass windows. At the top of the hill, overlooking the harbour, is Fort George, guarded by a row of cannons pointing over the bay.
Most of St George's visitors are day-trippers, ferried ashore from the gleaming cruise ships anchored in the bay. Steel bands drum the passengers ashore and eager taxi drivers jostle for their custom. Their first stop is the market, noisy and colourful, where bananas, breadfruit, yams and papaya are piled under the shade of black umbrellas. A man brandishing a machete sells coconuts with a straw to drink the milk. The musky scent of nutmegs, cloves and cinnamon hangs everywhere, a reminder of Grenada's other name, the Spice Island.
Away from St George's and the luxury hotels, Grenada feels more like a third-world country. The roads are a collection of potholes laced together by narrow ribbons of asphalt. Goats and cows are tethered by the roadside and chickens scratch underneath the little wooden houses built on stilts. Children fill plastic bags with water from standpipes and stagger home leaving a wet trail behind them.
Chapters of history lie behind the names on the map. The town of Sauteurs got its name from the desperate attempt of the Carib Indians to escape the French in 1651, when they jumped off the cliffs to their death on the rocks below. The mixture of French and English names - Grenville, Lance aux Epines, Woburn and La Sagesse - hints at the series of fierce battles for ownership of the island after Christopher Columbus first caught sight of it 500 years ago.
The most recent conflict was just 14 years ago. Grenada made headlines across the world when American troops led an invasion force to crush the Marxist leaders of the People's Revolutionary Government. It was an extraordinary act of muscle-flexing, provoked by the paranoia of the Cold War. The barbed wire on the beaches has now gone, and the only reminder of the fighting we saw was bullet scars on buildings near the Cuban-built airport at Port Salines. But there has been longer-term damage. The "intervention", as it is now called, damaged hopes of attracting more foreign tourists and investment. Both have been slow to return.
While Grenada was waiting for the tourists to come back, it suffered a further setback. Prices for its main exports, spices and cocoa, collapsed. Soon afterwards there was another blow. For the last 12 months, no bananas have been exported, the result of a World Trade Organisation agreement which ruled against Europe's preferential prices for Windward Island produce. With agriculture in decline and little industry to replace it, jobs are scarce. But Grenadians seem resigned rather than angry. Victor, who makes a living weaving baskets from palm leaves, told us that he expected his teenage children to be forced to leave the island to find work.
Like many other Caribbean islands, Grenada was formed by volcanic activity. One of the craters of the long-dormant volcanoes is now a lake, cradled high in the mountains at about 2,000ft. Known as the Grand Etang, its water shimmers like molten metal, mysterious and uninviting. To get there, we drove up steep, winding roads, past rows of nutmeg and cocoa trees, until we reached the rainforest, wrapped in clouds. We followed narrow paths between the trees around the lake, where giant bamboo towered, whispering and creaking. Ferns and orchids smothered mahogany trees, and scarlet hibiscus flowers dropped to the ground from the dancing branches of the blue mahoe tree.
While we were exploring we often got lost, but never for long. People were quick to give us directions. There was no sense of urgency. The laid-back attitude and slow pace of life were slightly irritating for the first few days. Once we had begun to relax, though, this became one of the most enchanting aspects of Grenada.
More delights were waiting underwater. Several miles of coral reefs on the west coast mean that scuba diving and snorkelling are popular. The reefs have also claimed numerous wrecks. One of these, the Bianca C, is a magnet for divers. The luxury Italian liner caught fire just outside St George's in 1961, and later sank. Now the ship lies upright on the ocean bed, about 100ft below the surface - not a dive for the novice.
Meanwhile, at sunset on dry land, in bars on beaches, visitors order rum punch and play "island spotting", the Caribbean version of trainspotting, comparing the delights of Antigua, Tobago, St Kitts and Barbados. Most of the comparisons, though, favoured Grenada ("less commercial", "people more friendly") and we realised we were the real winners; we had found the right island on our first visit. Beginner's luck.
Both British Airways (0345 222111) and Caledonian Airways fly to Grenada. The cheapest flights are on Caledonian Airways through Golden Lion Travel (01293 567 800) with the lowest priced ticket at pounds 311 including tax. The Grenada Board of Tourism is on 0171-370 5164/5.