Is it better to live inside a palace and look out at the humble dwellings beyond, or to live in a plain abode and be blessed by the view of the palace opposite? This is the luxurious conundrum behind any visit to the Ciragan Palace Hotel, reputedly Turkey's finest. The Ciragan Palace was the 19th-century home of the Ottoman sultans, who favoured its space, waterside location and views across the Bosporus over the cramped dwellings and political intrigue in Istanbul's old town.

You have to make a detour from the main part of the hotel to see it, though, because the old palace holds only suites, a restaurant and a curious little refrigerated caviar stall in its marble-clad basement where an old gentleman sits looking for all the world like he's never seen a customer in his life.

The rest of the hotel, including the reception and my room, were in a 1950s concrete block across the courtyard. "Well, if you sleep in the palace, you don't have a view of it, do you?" the charming receptionist said as she ushered me into my room. She swept back the curtains to reveal the palace proper across the courtyard, floodlit in gold, lined with Romanesque pillars, high arched windows and a magnificent French-style tiled roof. Beyond it was the inky Bosporus, dotted with ship's lights.

Later, I wandered through a long connecting corridor to the palace. All around the public areas are great marble pillars, gilt-and-turquoise ceilings and bronze chandeliers. The service at the hotel was fabulous, and so were the gardens. It was a breezy night, and the grounds, several carefully cultivated acres of the eastern edge of Europe, were empty of people. Barges steamed past, perilously close to the shore, and across the water the lights of Asia Minor flickered in the wind. In the vast swimming pool sat three seagulls.

Location, location. location

Ciragan Palace Hotel, Ciragan Caddesi 84, 80700 Besiktas, Istanbul, Turkey. (00 90 212 258 3377; The hotel is a 15-minute taxi ride (25 minutes by bus) north of the Golden Horn and Istanbul's old city.

Time to international airport: Istanbul's Ataturk airport is 20km south of the hotel; depending on traffic, the taxi ride takes up to an hour and costs around 15m Turkish lire (about £15). Alternatively you can take two buses, changing at Taksim Square: this costs TL4m and can take up to 90 minutes.

Are you lying comfortably?

The smallish bedroom was festooned with lovely touches: a silver platter of Turkish delight on top of an antique occasional table, and beside it a silver finger bowl filled with water and rose petals. Embroidered black, amber and crimson silk cushions lay on top of the bed, and on the balcony was black wicker furniture so one could dawdle and look out at the water. The bathroom was a miniature museum of marble and intricate tilework, with vases and more silverware.

Staying in touch: There was no in-room internet but the voicemail phone quadrupled up as an air-conditioning regulator, room lighting master panel and alarm clock, all sharing the same digital display, which gave the illusion of high technology while making everything very complicated.

The bottom line

Rooms with a view of the Bosporus start at £210 per night, including breakfast.

I'm not paying that: Buyuk Londra in the city centre has rooms with views of the Golden Horn from TL35m (£35) per double.