"Gross national happiness is more important than gross national product." So said Jigme Singye Wangchuk, King of Bhutan. It was this statement which first made me curious about a mysterious mountain kingdom squeezed between India and Tibet.

The more I found out, the more fascinating it became. As with Tibet, Bhutan's rulers believed in keeping the foreigner out, which means that the country is virtually untouched by the modern world. It is a medieval land of ancient dzong (monastery-fortresses) and archers, and even today the people wear the traditional national costume - by law. They are of Tibetan stock, and their houses are like beautifully built Swiss chalets with huge eaves and intricate Buddhist motifs to ward off demons.

It is a stupendously beautiful country. The southern foothills are covered with tropical jungle; the central valleys are highly cultivated and separated from one another by high ridges. The mountains to the north, part of the Himalayan chain, are mostly unmapped, unnamed and unclimbed; many are held sacred, or are gods in their own right.

The king allowed Westerners in for the first time in 1974 to witness his coronation, and since then very limited tourism has been allowed. Whereas the Himalayan kingdom of Nepal, to the west, had 250,000 visitors last year, Bhutan allowed in only 4,000, with about 1,000 of those going trekking around the interior. By stipulating that each tourist had to spend a minimum of $200 a day, and that they travelled in groups of more than five, Bhutan ensured that the maximum foreign exchange entered the country, together with the minimum foreign disturbance. People end up paying more than pounds 3,500 for a three-week walking holiday. Considering the environmental damage done to parts of Nepal by mass tourism, the King chose wisely.

I was fortunate enough to persuade a tour company to send me there as a trek-leader. Each group of Westerners walking in the interior is generally accompanied by such a person, whose role is to liaise between the local trekking crew and the clients. The trek-leader has to sort out airport and hotel check-ins, and be a general troubleshooter and an all-round good egg who makes sure everyone is happy. A sort of Butlin's Redcoat in climbing boots.

Flying into Bhutan is an adventure in itself. You board a miniature aeroplane in Delhi, and drone over the plains of northern India. Beyond the pilot's head you see the Himalayas rear up in slow motion, and soon he announces that he can see Everest. You strain your eyes into the icy glitter. Then the plane begins a sharp descent. It banks round tightly, skims a ridge and suddenly lunges at a tiny airstrip. There is an appalling cacophony from the engines, and you are down in the capital, Thimphu.

I had been briefed for this moment. I raced down the steps and legged it for a small wooden garden shed on the airfield perimeter. With 10 people to clear through immigration I wanted to be first. As I received the last stamp I noticed with grim satisfaction some other poor sod of a trek-leader, fists full of passports, trying to fight off his clients. We were going to follow a route that was graded "strenuous". It went through the very heart of the country and along Bhutan's border with Tibet. I fancied doing this because I wanted a close look at some of the unclimbed mountains. The motives of my clients were more complicated. In age they ranged from 40 to 58, in occupation from company director to bookkeeper. For one of them it was the trip of a lifetime; for others, I suspect, it was a way of resolving some deep personal questions.

Our journey began at the extraordinary Taksang Monastery, or Tiger's Nest. It is attached, more like a swallow's nest, to a 4,000ft precipice. This is where the Guru Padma Sambhava flew to Tibet on the back of a tiger to defeat demons trying to oppose the flow of Buddhism into Bhutan. We were gazing at this building, which resembles a Weston-super-Mare guest- house bolted to a cliff, when I ventured the suggestion that as tourists we ultimately destroyed what we had come to see. We were in the country as a privileged vanguard of what I fear will become a torrent, and this thought had been bugging me ever since we'd landed. The homily was greeted with a stony silence.

And so began the trek proper. It's a congenial life. You are woken soon after dawn and given a steaming cup of tea. Shortly afterwards, as you digest the view of pink mountains through the tent door, an aluminium washing-bowl of hot water is placed outside your tent. Once washed and dressed, you pack a kit-bag and day-pack. The kit bag goes on one of 26 ponies, the day-pack on you. Then, while you eat breakfast at a table outside, the camp-staff take down the tents and load the animals.

Then the trials of trek-leadership start. As I was warned, two of the clients - usually the younger men - will decide to walk as fast as they can along the trail to prove that they are tougher than the others. They then reach a fork, and inevitably choose the path less travelled. They get lost and attempt to rejoin the correct track by traversing a steep and dangerous ridge that intervenes. Eventually they stumble into camp well after dark, bloody and exhausted.

Walking in early morning in Bhutan is enthralling. For anyone who likes gardening it is a constant delight; two of the clients were amateur botanists and the air was regularly split with cries of pleasure as they spotted a tree-hanging orchid or a familiar conservatory plant. Lunch might be had sitting on a natural lawn next to a river, or amongst the rocks on a high pass. Another three hours' walking and the night's camp-site is reached, and usually tea is ready. I loved the way the ponies rolled on the ground with joy when their loads were removed.

Trekkers are so few and the country so uninhabited that we were able to have fires most nights. This simply isn't possible in Nepal, a country ravaged by deforestation. One night we camped at the remote village of Laya. The people here are famous for their yak-hair clothes and curious conical bamboo hats. And as I listened that night to the extraordinary singing of the local girls - a strange, hypnotic threnody - I felt oddly dislocated back into a medieval land. Forget time travel, I thought; the past is here, now, and in Bhutan.

Graham Hoyland