AS THE early morning Brittany Ferries ship nosed slowly into the harbour at Santander, a sleepy-eyed young woman and her husband pushed their way through the heavy door on to the open deck.

Dressed in T-shirts and light cotton trousers, they were obviously not expecting the cold, stinging breeze that was whipping in. The couple stared in disbelief at the dank mist hanging over the smart end of town. Occasionally the greyness broke to reveal far-away glimpses of spectacularly large mountains. It had a dreamlike quality.

'This can't be Spain,' said the woman, hunching her shoulders against the cold and damp. In front of her now lay a handsome stretch of golden beach, foreground to an elegant mansion. The woman cuddled up to her husband. 'This can't be Spain,' she said again and again.

For those familiar with the Mediterranean end of Spain, the country's northern fringe can come as a huge surprise. This is green Spain, cool Spain, a land of mountains, its feet planted firmly in the boisterous waters of the Bay of Biscay.

Drive east from Santander towards the French border and you pass through a landscape that might have been copied from Switzerland: craggy mountain-tops, green, green grass and huge swaths of forest.

Then you bump into the outskirts of Bilbao: steaming factories, smoking, stinking chemical plants and rows of neat tower blocks, all of which provide an agreeable reminder of busy Birmingham in the Sixties. You notice the graffiti on walls, bus shelters, roofs and tunnels - even on the road itself. And everywhere you suffer misdirection from road signs whose Castilian place names have been messily paint-sprayed.

With a jolt you realise you are in Basque country, a region familiar not for its lush countryside but intermittent reports of murdered policemen and IRA- style bombings by ETA terrorists. (Happily, greater autonomy for the Basques, public revulsion at the political violence and the recent arrest of ETA leaders have resulted in a marked decrease in terrorist activities.)

The rush to embrace the Basque language - which largely consists of words that look like the worst Scrabble hands imaginable, all j, x, z, k and v - poses problems for the newly arrived motorist. Presumably in deference to local sensibilities, sometimes only the Basque name is shown on a signpost, which is fine if you know that Hondarribia is also Fuenterrabia, but will cause a mighty driver/navigator barney if you do not.

A little way east of Bilbao, a motorway sign points towards Gernika, the Basque name for Guernica, spiritual capital of the Basque country. The town achieved an awful celebrity on 27 April 1937, when Germany, supporting Franco in the Civil War, used the town as a test-bed for saturation bombing.

For three-and-a-quarter hours, a squadron of Junkers and Heinkels bombed and strafed Guernica, killing more than 1,600 people and injuring hundreds more. The terror inflicted on this quiet country town, now busy with market-day visitors, was captured in what is perhaps the most famous 20th- century work of art: Picasso's Guernica.

The town has been pleasantly rebuilt, leaving no obvious reminders of this awful episode. You can still see the old parliament building, miraculously unscathed, and within a little Greek temple lie the remains of the famous Tree of Guernica, beneath which the parliament used to meet. At lunchtime the sunny streets are deserted except for laughing schoolchildren.

A short drive away lies the Basque coast, one of the world's most handsome stretches of coastline. The old whaling port of Guetaria is a gem. The harbour is still busy with trawlers unloading fish. Well before lunchtime, the restaurants' open-air barbecues are cooking the squid (chipirones) for which the town is famous.

Guetaria's principal claim to fame, however, is the navigator, Juan Sebastian Elcano, who sailed with Magellan on a 16th- century circumnavigation of the world. After Magellan was murdered in the Philippines, it was left to Elcano to bring the ship home, making him the world's first circumnavigator, a feat celebrated with a memorial in a bizarre Stalinist, epic style at the entrance to town.

After all the surprises within a few hours' drive from the ferry port, you may feel ready for anything. But nothing can prepare you for the stunning spectacle of San Sebastian. Ideally, you should be led blindfold to the look-out point at the top of Monte Igueldo: open your eyes and you will be treated to one of the most sumptuous views in the whole of Spain.

In the foreground is the majestic sweep of La Concha beach. Behind the golden sand and Edwardian promenade, you can pick out the Miramar Palace, once the summer residence of the Spanish royal family, and way behind the town are more of those craggy mountains. Above San Sebastian, on Monte Urgull, towers a huge statue of Christ (at present masked by scaffolding).

I thought places such as San Sebastian has ceased to exist. This good old-fashioned seaside resort manages to be elegant without the slightest trace of pretension. A few steps from the viewpoint at Monte Igueldo, a mini-funfair complete with dodgems and stalls invites you to shoot a duck or burst a balloon to win a goldfish. Along the prom during the evening gran paseo, plenty of chic-looking women parade in designer outfits, but the beach will be full of kids playing football.

I was told that the former Cardiff City and Liverpool player John Toshack, the highly revered Welsh manager of the local team Real Sociedad, is often to be seen strolling the prom. I wanted to tell him that Barry Island was never like this, but our paths never crossed.

At the prom's westernmost point you will find the Combs of the Wind, a striking sculpture of concrete blocks and iron tentacles by local artist Eduardo Chillida. Watch out for the vents through which mighty blasts of air are blown by the rising and falling sea; high tide is the time to see it at its best.

The city's plushest accommodation is to be found at the Hotel Maria Cristina, which has double rooms from pounds 120 per night. This Belle Epoque delight is guarded by a doorman in a uniform straight from a Quality Street tin. The hotel is extremely smart, but even if you are wearing jeans and trainers, you will receive a warm salute.

Perhaps San Sebastian's greatest attraction is the old town, its narrow streets bursting with restaurants and tapas bars. There are a couple of places where people go to be seen rather than to eat, but most of these restaurants are regularly frequented by local residents. At even the smartest place, a decent set meal can be had for less than pounds 12 a head.

Food is taken very seriously here. As well as a Gastronomic Academy, San Sebastian has more than 30 Sociedades Recreativas: men-only food clubs where members cook each other meals in well-appointed club kitchens.

San Sebastian is such a pleasant spot that one fears its success will spoil it in the way that Mediterranean resorts have suffered. Best see it now.

Take the Jaizkibel Road out of San Sebastian for another luscious dollop of coastline. The road leads to Fuenterrabia, which has an impressive old town and an even more impressive Parador hotel in the former Palace of Carlos V. Although the Parador is being refurbished and you may not be able to spend the night in the old town, you can still enjoy its magnificently preserved houses with ornate balconies and carved-wood cornices.

In the Sixties, the frontier between France and Spain emphasised the prosperity of the former and the Third World decay of the latter; today, you hardly notice the transition from one side to the other. The new open frontier has ended the huge passport control queues, so that within half an hour of sunning yourself in San Sebastian, you can be dipping your toes in the sea at St Jean de Luz.

This town does not have San Sebastian's stunning looks, but it is a pretty fine resort. It serves tourists, but first and foremost it is a fishing port with a vibrant life of its own.

Biarritz was where the European aristocracy went before they discovered the Riviera. You might expect the word 'faded' to pop up, but not so. Its two grand hotels may not be quite so grand as they were and its casino is being reconstucted, but like San Sebastian it has a comfortable, relaxed ambience in marked contrast to the swank- spots on the Cote d'Azur.

On a drive to the lighthouse I was tail-gated by a lunatic joy- rider, and when I arrived a huge black storm was gathering. I dropped some francs into the telescope to see if I could spy San Sebastian, but the storm was coming in too fast, and the sea was throwing up sheets of white water with an angry roar.

Suddenly lightning flashed and almost simultaneously the ground shook as a huge clap of thunder exploded overhead. The Basque coast was being rapidly subsumed in the murk. It was hard to imagine a more impressive spectacle. Unexpected, perhaps, but the best things in travel usually are.

Ferries: Brittany Ferries (0752 263388), Plymouth to Santander every Sun and Wed; eight-day return for two adults and car, at present pounds 387, including two-berth cabin. P & O European Ferries (0304 203388), Portsmouth to Bilbao every Sun and Wed. 'Mini-break' (travel Sun or Wed, return following Thurs and Mon respectively), pounds 297 for two adults, car and cabin; eight-day return, pounds 364.

Accommodation: San Sebastian has about 60 hotels: if money is no object, try Maria Cristina (010 34 43 42 49 00). Hotel Codina (010 34 43 21 22 00) is satisfactory at pounds 30 per night for double room.

Further information: Oficina de Turismo, Centro de Atraccion y Turismo, Calle Reina Regente (010 34 43 48 11 66); Spanish National Tourist Office, 57/58 St James's Street, London SW1 (071-499 0901).

(Photograph omitted)