A dense mist lifted, revealing mountains and water suffused with the magic of early morning light. Framed by the carved porch of my houseboat, the world of Dal Lake looked utterly serene. Suddenly the stillness was broken by an iridescent flash descending into the water, leaving just a hint of a ripple. A small kingfisher surfaced. It flew to the side of the houseboat where it perched, a taut and tiny assembly of turquoise and orange, scrutinising the water. Then, abruptly, it darted into the lake again. The extraordinary beauty and that burst of aggressive energy were, I felt, entirely symptomatic of the haunting nature of the Kashmir Valley.
For a good 20 years, this fabled land in north-west India has been as notable for its tragic problems as its dreamily picturesque qualities. However, in November, the Foreign Office eased its warning against travel to parts of the region.
Over the previous 12 months, outbreaks of unrest in the state of Jammu and Kashmir had diminished significantly. So, the advice against visiting the cities of Srinagar and Jammu was lifted, along with the caution against road trips between these two places.
Road blocks have since been removed and the presence of the Indian military has been greatly reduced. With the summer tourist season under way, the hope is that other areas in the state will also be considered safe by foreign governments. Yet even given the remaining restrictions, Kashmir is excelling as one of the most exquisitely exotic destinations for 2013, with visitor numbers soaring in hotspots such as Srinagar, where the 25,000 rooms available are only meeting a quarter of demand. As I arrived, the mood was palpably optimistic.
The region known as the Kashmir Valley is an area about the size of Yorkshire. It's a "valley", in that it is centred on the Jhelum River as it carves a dramatic course through the Pir Panjal range of the Himalayas.
More or less in the middle, the city of Srinagar and its surroundings have been a staggeringly beautiful holiday resort since at least the times of the great Mughal emperors in the 16th and 17th centuries. With elephant-borne harems and great trails of attendants, they would arrive here from the heat of Agra and Delhi, enjoying the lush landscape and creating sublime gardens, several of which are still thriving today.
Then came the British, also trying to escape scorching temperatures elsewhere in India. The local maharaja would not allow them to buy land and build houses, so they adapted traditional doonga boats instead. Complete with interiors of intricately carved deodar wood (a type of cedar), Kashmiri houseboats became an intrinsic part of a uniquely glamorous playground.
And that was the Kashmir I first knew – a very long time ago. In the 1960s my family lived in Chanakyapuri, the diplomatic enclave of New Delhi. One day, we packed up our Austin 1800 – my parents in the front, three small children in the back – and set off for Kashmir, 875km (540 miles) north-west.
We had a terrible journey lasting days and involving punctures, mechanical failure, floods and other near disasters. Just before reaching the Kashmir Valley, our final challenge was a dauntingly long tunnel in which there was a danger our car would break down again. We emerged from the Banihal Tunnel (Bunny Hole to us kids) to find ourselves suddenly in what seemed a land of milk and honey, with dazzlingly green pastures grazed by bucolic-looking cows and sheep.
For two weeks, home was a glorious houseboat on Nagin Lake just beyond central Srinagar. The charming owners were our hosts, taking us (when little legs would allow) walking, pony trekking, fishing; cooking us meals gently infused with Kashmiri saffron and other spices; brewing us deliciously aromatic kahwa, Kashmiri-style green tea flavoured with cardamom and cinnamon. It was one of the most halcyon holidays of my childhood. And I was wonderfully surprised to find many vestiges of that Kashmir on my recent return.
I spent the first couple of days almost entirely on water. Srinagar's two lakes, Dal and Nagin, are both peppered with houseboats, at the moment mainly catering for the domestic market, which has seen a surge in the past few years. However, Butt's Clermont Houseboats is a slight world apart on the western side of Dal Lake. Set in its own exclusive haven just off Nasim Bagh (literally "Garden of Bliss" – and one of the earliest such Mughal creations), this collection of five elegant boats has attracted celebrity guests from the late George Harrison to US Senator John McCain (in 2011).
It was entrancing to slip back into the sort of lake life I'd enjoyed as a child. You explore the waterworld in shikaras, little gondola-like boats whose heart-shaped paddles are modelled on the bulbs of the lotus flowers that grow abundantly here. You get up remarkably early to the echoing call of the muezzin and visit the floating vegetable market held at dawn, watching long-tailed boats filled with onions, aubergines, tomatoes and more, in a sort of gentle dodgems of trading. And, of course, you spend hours simply sitting on the porch of your houseboat gazing at the views and the antics of kingfishers and cormorants.
For all the romance of houseboat living, however, there are greater comforts on land. I moved on from Butt's Clermont to the new Vivanta by Taj hotel, which offers a staggering panorama over Dal Lake from its hilltop vantage point on the eastern fringes of Srinagar. This state-of-the-art property opened in 2011 with 82 spacious bedrooms, an excellent restaurant with ample terrace and a beautifully sited pool.
There is a host of trips to make from here. I spent a day taking in Mughal sights: the tranquil gardens of Shalimar Bagh and Nishat Bagh – with gorgeous fountains and terraces; the ruins of Pari Mahal, a 17th-century palace and observatory built in the Zabarwan Hills just outside the city. I also headed up to the spectacular, pine-clad hill station of Gulmarg which offers summer hiking and pony trekking – and skiing in winter.
Back in Srinagar I enjoyed an absorbing morning tour around the venerably tumble-down city. My guide was a designer, Renuka Savasere, who has been documenting the heritage of pashmina weaving. As we visited mosques and browsed markets, she explained how craftmanship is inherent in Kashmiri culture. Kashmir was on the Silk Road and trading also appears to be in its very DNA. Everyone, it seems, has a shop: in town, by the water, on the water in a boat.
The myriad shopping opportunities and gorgeous goods – soft, embroidered leatherware, never-ending varieties of fine woollen fabrics, beautiful bowls and boxes – were familiar from my childhood.
The quirky names, too. Suffering Moses was our favourite shop in the 1960s. Set on The Bund in central Srinagar, it is still producing exquisite hand-painted papier mâché goods today. The lakes are still plied by Mr Wonderful, a flower merchant whose boat is emblazoned with the name. And then there's a Mr Delicious selling waterborne chocolates too.
I encountered them on Nagin Lake, on a quest to see if I could find the houseboat I had stayed on as a child. That proved a wonderfully easy mission. I simply asked a shikara boatman if he knew a houseboat Monarch, and he took me straight there, across the lake. The current Monarch is a gracious reincarnation of the vessel I had known; the owners are the same family and they gave me a touching welcome.
Would I return for lunch some time, they asked. So on my last day I did. We sat on the porch and, as I gazed at the beautiful outlook, I heard their story. During the height of the militancy their business all but closed, during which time they were harrassed, as many locals were, both by activists and by the army, often brutally so. So, like many Kashmiris, they packed up their pashminas and other fabrics and left, trading around India and as far afield as Thailand. They had been able to resume their houseboat business about six years ago.
Like everyone they knew, they just wanted peace. Enduring peace.
1947 Partition of India. Majority-Muslim Kashmir is governed by a Hindu maharaja. No clear agreement as to whether the Kashmiri people want to join Pakistan or India. Armed tribesmen from Pakistan invade and Indian forces arrive to repel them.
1949 After a UN-brokered ceasefire, part of the territory is ceded to Pakistan.
1965 Second Indo-Pakistan war over Kashmir breaks out in April and ends in September that year.
1972 Shimla Agreement – India and Pakistan agree to respect the "Line of Control" dividing Kashmir, and to work towards a peaceful solution to their dispute.
1989 Backed by Pakistan, armed uprising against Indian rule breaks out in the Kashmir Valley.
1990S Insurgency continues.
2000s More unrest by militants. General improvement in relations between India and Pakistan. Increasingly civilians in the Kashmir Valley simply want peace and to resume normal lives.
Harriet O'Brien travelled with Greaves India (020-7487 9111; greavesindia.co.uk) which offers a nine-day trip to Kashmir from £2,250pp. The price includes flights from Heathrow to Delhi and, after a night at The Oberoi New Delhi, air travel to Srinagar; full board at Butt's Clermont Houseboats on Dal Lake and B&B at Vivanta by Taj Dal View Srinagar; transfers and sightseeing.
Vivanta by Taj Dal View Srinagar, Kraisangri, Srinagar (00 91 194 246 1111; vivantabytaj.com). Doubles from R13,100 (£144), B&B.
Butt's Clermont Houseboats, Nasim Bagh, Srinagar (00 91 194 2420325; buttsclermonthouseboat.com). Doubles from R6,000 (£66), full board.
Monarch Houseboats, Nagin Lake, Srinagar (00 91 194 2428091; firstname.lastname@example.org); doubles from R4,500 (£50) full board.
Renuka Savasere (00 91 9906573224; email@example.com) offers half-day guided heritage walks in Srinagar for R2,000pp (£22).
British passport holders require a visa to visit India; £92.90 (0905 757 0045, 95p/min; in.vfsglobal.co.uk).
For full FCO advice, see fco.gov.uk