Old master or cutting-edge installation? Bruges is both, says Harriet O’Brien

"There's something going on in Bruges," confides Alain Swimberghe of the Absolute Art Gallery. "The arts are growing fast – new businesses are starting up all around us."

Bruges has lost none of its grace and style: bright white swans glide along the still waters of canals; cobbled streets resound with the clatter of horse-drawn carriages; church bells ring out across a skyline of spires and weathervanes. Much of Bruges not only looks as if it has serenely stepped out of the 15th century, there are appropriately resonant sound effects too.

Yet this most atmospheric of cities is focusing firmly on the future, with a quiet dynamism that is luring in contemporary artists, designers – and visitors.

The Absolute Art Gallery at Dijver 4 (00 32 50 49 10 12; www.absoluteartgallery.com) re-opened in March this year after a thorough rejuvenation. This large, light-filled space opens 11am-6.30pm daily, admission free. It represents 25 leading artists, including the celebrated Bruges painter Christine Comyn.

An excellent way to comprehend the scale and excitement of the city's cultural scene is to follow the Bruges Art Route. This local initiative started last year aimed at presenting the city's growing collection of paintings, sculptures and works-in-progress. Three walking or cycling trails have been devised around the centre, taking in studios and galleries where you can see contemporary works by Bruges' artists. Maps are available at the tourist office or online at www.b-a-r.be.

In April this year, an intriguing new museum opened in a magnificent building dating from 1399. The Friet Museum at Vlamingstraat 33 (www.frietmuseum.be) celebrates one of Belgium's major contributions to the food world – frites, or chips. Sounds gimmicky? Perhaps, but the reality is a serious, yet lively, exhibition on the history of potatoes, the frite itself, and the recipe for making the perfect chip. The museum was created by Bruges entrepreneur Eddy Van Belle who also established a chocolate museum at Wijnzakstraat 2 (www.choco-story.be).

Unsurprisingly, Bruges is generously endowed with chocolate shops. But for a real treat, and to get a flavour of the underlying creativity in this historic city, make for The Chocolate Line at Simon Stevinplein 19 (www.dominiquepersoone.be). Here, dynamic chef Dominique Persoone puts together unlikely taste combinations: tomato, basil and olive milk chocolate; cauliflower with white chocolate and more.

Elsewhere, the city presents an inspiring choice of modern cuisine, from De Karmeliet at Langestraat 19 (00 32 50 33 82 59; www.dekarmeliet.be), which holds three Michelin stars, to Den Dyver located at Dijver 5 (00 32 50 33 60 69; www.dyver.be) where an elegant style of beer cuisine has been developed. Dishes are cooked with different Belgian brews and suggestions are made for accompanying beers to drink with each course. And to sample a great range of beer, head to Bruges Beertje bar at Kemelstraat 5, which stocks 300 Belgian brands.

Suitably refreshed, you can wander the lanes around the Onze-Lieve-Vrouwekerk, the Church of Our Lady. Get away from the crowds by walking along quiet streets running east to the old walls where three windmills still stand. Or head south and amble through the Begijnhof, which looks like an elegant cross between an Oxbridge college and a complex of almshouses. These groups of buildings were refuges for women (originally the wives of Crusaders), and they are known as particularly tranquil places.

Bruges is, quite simply, beautiful – and beautifully preserved. The underlying challenge has been to conserve the past without stultifying the present.

Take Bruges' most significant museums. Groeningemuseum at Dijver 12 (www.museabrugge.be – the umbrella site for 16 of Bruges' museums) recently had a dramatic refurbishment to make its hanging spaces bigger and brighter – all the better to show off one of Belgium's finest collections. Here you'll see masterpieces by the pre-Renaissance "Flemish Primitives" – Jan van Eyck, Hugo van der Goes, Hieronymus Bosch and more – as well as works by Belgian Expressionists and Surrealists. Nearby at Mariastraat 38, Memling in Sint-Jan-Hospitaalmuseum – containing six works by the great Flemish master Hans Memling – has also been given a recent revamp. In Bruges, the past is always being refreshed for the future.

More information from the Bruges tourist office at Concertgebouw, 't Zand (00 32 50 44 46 46; www.brugge.be) www.visitflanders.co.uk