Rhod Sharp snorkels in the Cayman Islands
In the blue-painted resort pools of Grand Cayman, coiled in the Caribbean, south of Cuba, two types of human behaviour may be recorded. Type A behaviour typically involves lashings of sunscreen, Red Stripe beer, regular breathing and a John Grisham paperback such as The Firm - in which the Cayman Islands play a critical role.

Type B humans stand up to their armpits in swimming pools being instructed how to spit in their masks, fit tanks into shoulder harnesses, check their breathing apparatus and blow like breaching whales.

Few sentient humans can stand the prospect of spending much time with either, so each day after breakfast we would clear out to snorkel one of the easiest shore dives in the Caribbean. Every day we drove the one road from our hotel past a billion dollars worth of tasteful corporate concrete to West Bay cemetery and the most favoured dead people on the island.

If they could snorkel Cemetery Reef as we did, they would see wrasses and angelfish, rainbow parrotfish, horse-eye jacks and yellow goatfish. These are fish who love people and have no fear of being eaten in this marine national park.

Being without wetsuits and tanks, snorkellers also get to sit unencumbered and soak up the sun on what must also be the cleanest beach in the Caribbean. And nobody tries to sell you conch shells or palm hats, because ordinary people are too busy making real money. Grand Cayman famously has no income tax, no capital gains tax, no corporate tax, no estate or gift tax and no plans to introduce them. Property is attractive and expensive and even the one-time 7 per cent property purchase tax is no disincentive to people willing to blow $250,000 on a modest beach-front apartment, or $3m on an 8,000 sq ft sea villa.

Rather like Seven Mile Beach, which is only five miles long, the Cayman dollar, a colossus in a sea of weak-kneed currencies, is only 80 US cents. It's essential knowledge for anybody planning a trip here. American visitors tend to be outraged at the idea of handing over excessive amounts of George Washingtons on holiday. "The Vacation Spot from Hell", announced Parade magazine a couple of years ago. "How do you justify devaluing the US dollar 25 per cent?" wrote one contributor to the valuable Internet newsgroup. It turned out to be an isolated comment. "Great time... very quiet and relaxed" was a typical verdict and it's one I go along with.

Other islands in the Caribbean - Jamaica, for example - are more exciting in every sort of way, good and bad. Grenada is greener and lusher. And the truly expensive resorts will remain out of reach of ordinary travellers. But Cayman has the sea and the reefs. The undisputed divers' paradise of the Caribbean has over 60 separate dive sites, not including the outlying islands of Little Cayman and Cayman Brac. Qualified divers are led to sites of extreme environmental importance by licensed operators like Bob Soto, who provided the facilities for the 1993 Tom Cruise film version of The Firm and boasts the only PADI 5-star training facility in Grand Cayman.

The months from April to October see the best weather conditions for the macho jewel of Cayman dives - the North Wall, where undersea cliffs start their plunge to the 4,000ft Cayman trench. Landlubbers that we were, we dove the North Wall. Atlantis submarines ferry non-divers and cruise- ship passengers down the 100ft wall and back. Lured by Hans and Lotti Haas-style shots of floodlit coral, we took a night dive. Climax of the holiday it was not. Fish go to sleep at night. A lot of sand, much browny- orange coral and a bizarre cabaret involving a diver, might play to the resort crowd, but at a cost of pounds 55 a person the night dive at least is not recommended.

That Grand Cayman has the highest per capita income in the Caribbean is perhaps the final attraction of this place, which was visited by barely 27,000 Brits last year (and 266,218 Americans). Nobody begrudges you your holiday.

"We are fortunate to live in such a lovely place," expounded Captain Dexter, who skippered us out to an afternoon on the sand bar known as Stingray City. It's barely 10 years since a stingray tamer called Pat Kenney discovered that the southern or whiptail ray could be stroked and fed.

Skin Diver magazine gave the place its name and declared it "the best 12-foot dive in the world". On any given afternoon it's a parking lot for yachts and launches, with room for more. I got friendly with silky, 50lb rays hustling for titbits of squid. My wife, who did not fancy the idea, surveyed the dark flapping shapes from the safety of the boat. Maybe next time I can get her into some deep water.

The only airline which flies direct from the UK to Grand Cayman is Caledonian Airways (0345 222111). The lowest official return fare for July is a 14-day Apex of pounds 781. Cheaper flights can be found on indirect flights via the US, but airport taxes can add as much as pounds 50 to the cost. Several operators offer snorkelling and diving. A certification course costs around pounds 200-pounds 300. Details can be obtained from the Cayman Islands Dept of Tourism, 6 Arlington St, London SW1 (0171-491 7771).