MONDAY morning, at the end of July last year, found me sitting in my dressing-gown with toast in one hand, telephone in the other, pursuing a holiday bargain. At 9.30am we were offered overnight flights to Iraklion for pounds 99 return, but in the 20 minutes it took us to decide, the available seats had already gone.

Like many people, we used to plan our summer holidays before Christmas. We would decide where to go, send for brochures and ferry timetables, then spend the long autumn evenings poring over the details. Although this was great fun, and the certainty of a holiday helped to sustain us through the winter, it always seemed a little staid.

So last year we thought we would be different. We would book an 11th-hour deal to God-knows-where and take our chances. Late-availability bargains were legion, according to the newspapers, thanks to the misplaced optimism of tour companies in the wake of the general election, and we were sanguine, even though we were hoping to travel at peak season.

In early July we raided our local library for every travel book and video on the most likely destinations, and made preliminary decisions. Third World destinations were ruled out because vaccination programmes must be planned weeks ahead. And because we wanted time in the sun, we narrowed our choice to southern Europe or almost anywhere in the US.

Once we had briefed ourselves on the places to consider, we began to research what was on offer. I hoofed around the local travel agents, took to watching Teletext, bought lots of newspapers for their travel ads - and what a lot there were. All over the world, destinations beckoned but most compelling were promises of flights to Palma for pounds 39 (unfortunately only available until mid-July) and 50 per cent-off sites and camping holidays. The possibilities seemed endless. The more we looked, the more confused we became. One thing, however, seemed obvious: the longer we left it, the greater the uncertainty but the cheaper the price.

It was time to be a little more disciplined about decision-making. Did we want a flight or a package? In the end, we decided to go for the flexiblity of a flight-only deal, but this merely increased our anxiety. What if we could not find accommodation? What would we do for transport? We would have to hire a car at the resort, which seemed merely to add to the hassle. We made a short list of preferred places, including Lisbon, Faro, Malaga (for Seville and the Sierra Nevada), almost anywhere in Italy, Crete, Athens and, at the insistence of my daughter, Orlando.

On Sunday 26 July, I was at the newsagent's for 8am, and by 8.20am our drawing-room floor was strewn with the travel pages of the newspapers. At 11am I started ringing while my wife packed the suitcases.

By 4pm we had still to make a booking, but I had at least learnt a lot. For instance, did you know that a hire car booked in the UK before departure is a lot cheaper than one booked at the resort? Or that leaving your car at the airport can set you back more than pounds 50 for a fortnight, but that some airport hotels will let you leave it on their premises if you book a night's accommodation before flying out? We thought we would take advantage of this if we were offered a breakfast-time flight from a distant airport.

Thus it was that, first thing on the Monday, I resumed my quest and agonised too long over Iraklion. By 10.30am we seemed all set for Orlando. But then, despite the children's enthusiasm and a tempting flight offer of pounds 265 return, we could not quite bring ourselves to endure a completely culture-free fortnight.

We settled for Portugal. At about 2.30pm I secured four pounds 89 seats on a Gatwick-Faro flight the following Thursday. Car hire (a Fiat Tipo) was arranged for pounds 165 a week, and insurance was booked with the agent. The total bill was less than pounds 800 for a two- week holiday, but we still had to budget for food and accommodation.

One of the attractions of the flight was the 8.45am departure. We could reach Faro before lunch and have plenty of time to find a hotel. We live three hours' drive from Gatwick, so we decided to book a family room at the Skylane Hotel. This allowed us to leave the car free of charge and take advantage of the complimentary taxi service to be at the terminal building for 7am. The flight plus car hire saved us money as well as time (to take our car to Portugal, including ferry, petrol, meals and accommodation, would have cost pounds 1,000).

At Faro we picked up the Tipo and headed west in glorious sunshine. We had read that most towns have tourist offices which can arrange accommodation. However, it is best to be there before lunchtime. We arrived at the turismo in Silves at 1.30pm, to find that the only available rooms were in a rather expensive hotel, so we pressed on to Praia da Rocha. There, the tourist bureau found us a delightful family-run hotel, at pounds 40 a night for the four of us, on cliffs overlooking a beach with caves and rocky promontories. We used this base to explore the western Algarve as far as Sagres and Cape St Vincent.

Next we headed north. A four-hour drive found us in the delightful 'fishing resort' of Cascais, a few miles west of Lisbon. The tourist office found us a spacious three-bedroomed apartment for pounds 40 a night, and we settled in for six pleasant days.

There is so much to see in this part of Portugal. The coastal train goes into Lisbon, with its faded gentility and wealth of museums. The Sintra Hills, just back from Estoril, are like a subtropical version of the Malverns, with the added attractions of castles, palaces and even a monastery with cells carved out of the rock and lined with cork. Indeed, the combination of seaside, hills, capital city and museums seemed to satisfy everyone's needs. But the main attractions for my family were the excellent out-of-town shopping malls with their supermarkets and multi-screen cinemas showing American films.

The supermarkets offered the same unbelievable choice of delicious food and wine that we had been used to in France, though at lower cost. What was more, they all seemed to be open until llpm, so we could go to see, say, Batman Returns for just pounds 1 at 7pm, then pile into the supermarket before it closed.

Eventually we tore ourselves away from the region and headed north about 100 miles to Sao Martinho do Porto. This delightful little town, set in a cove reminiscent of Lulworth, is an ideal place from which to explore such places as Alcobaca, Obidos and the limestone caves at Mira d'Aire. There is also Fatima, if you can brave the coachloads of pilgrims.

Our holiday was nearing its end, so we headed back towards the Algarve, taking in Evora on the way - another historic walled town, off the tourist route and something of a jewel.

We struck south-east across beautiful rolling countryside until we hit the Tagus and some of the quietest, most desolate countryside we had ever seen. Eventually we reached Evora and had a truly memorable meal. We picked a restaurant (from Portugal: the Rough Guide) where we noticed that the French were also queuing - a sure sign of a good feed. The enormous meal for four, with wine, came to only pounds 35.

Next morning we made our big mistake. Because we dallied in Evora's huge market until 11.30am, we did not reach the Algarve until 4pm. We had broken our golden rule of finding accommodation early, and everything was booked. Those delicious goat's cheeses we had bought, and the splendid pottery we had spent so long admiring, now seemed to have come between us and a good night's sleep.

We drove desperately from one hotel and one resort to the next. Yes, accommodation was available, but at a price. The pounds 150-a-night establishments still had something to offer, but we were in a Tipo, not a Corniche.

Eventually we were offered two rooms in a private apartment, but the price was hiked by 50 per cent at the last minute, and we refused to be gazumped. Thus, tired and hungry, we made a rational decision: we would eat well, get a little drunk and sleep in the car.

At 9am the next day we checked into paradise: an Ibis hotel that had opened just five days before. For pounds 42 we had two double rooms, each with a bathroom, satellite television and air-conditioning. We all showered and went to bed.

The following afternoon we flew back to torrential rain and the prospect of another year of toil. But we were sold on last-minute holidays, fly-drives and, above all, Portugal. It felt genuinely different. The people seemed to like us, we liked them and the food was wholesome, fresh and cheap. The holiday cost us pounds 2,200 and, allowing for exchange-rate fluctuations and Portuguese inflation, it should be possible to have a similar holiday this year for about pounds 2,500.

There is a good chance of last-minute bargains, but be flexible and allow for an element of luck. We have vowed to go back to see the far north, but when we do, it will be on the spur of the moment. Autumnal planning is a thing of the past.

The Molyneux family booked their flight, car hire and insurance through Flightclub of Worthing (0903 231857). They spent the night before departure at the Skylane Hotel near Gatwick (O293 786971) and made extensive use of Portugal: the Rough Guide.

(Photograph omitted)