South America special: Ecuador - All change in the city of clouds

Ecuador's old colonial heart used to be a no-go area. But since it has had a makeover, it's a must-visit. Sarah Barrell goes exploring downtown

Strange to think that stopping for ice cream could be considered part of an historical tour. But in the "new" Quito old town, it seems things are changing so fast that a septuagenarian ice-cream seller with a lifetime pitch on a corner of Plaza San Francisco is considered something of an endangered relic.

Of course in the old town, a Unesco World Heritage Site since 1978, there's no lack of historical attractions. This sky-scraping city, capital of Ecuador in the northern Andes is home to some of the most stunning Spanish colonial architecture on the continent. The spires of some 30 churches spike Quito's skyline, including the oldest in the Americas, the Iglesia San Francisco, the jewel in the crown of yet another superlative - the continent's largest religious complex. Sitting at an altitude of 2,800m, Quito has always been breathtaking, but in the past few years the city's colonial hub has undergone a facelift that will truly take your breath away.

Until recently, the Quito founded in 1534 by the Spanish conquistador, Sebastian de Benalcázar, remained almost unchanged. Street traders clogged up the old town's main arteries, their awnings forming a patchwork roof over the streets, making assault courses out of plazas. "You couldn't navigate the central squares without being garrotted by a guy rope or forced into trying a frilly Quechua skirt," says my host, Dominic Hamilton, an English expat resident of Quito since 2002. "It took hours to walk across the old town," he says, as we survey Plaza San Francisco, now free from traders but for El Señor Helado, who hands us a guanabana-flavoured ice cream from his museum-piece wooden cart.

Along with twisted ankles, the downside of this mercantile scrum was that Quito's old town had, for tourists at the very least, long been considered unsafe. While traders from northern towns such as Otavalo plied their woven wares and felt hats, pickpockets pilfered at leisure from tourists and wealthy, unwitting locals alike.

After dark, once the traders had packed up blankets and boxes, the old town was even more of no-go zone. With no street lights to speak of, barely a restaurant in sight and no hotels either (or at least none with signs, regular hours or official rates), visitors to this ancient quarter of Quito were under strict curfew. They were sent to bed down amid the somewhat bland safety of the city's new town, to the north.

However, in the past few years Quito's old town has come under the spotlight - literally in many places. Posh street lighting now illuminates its main plazas and steep, narrow streets - all sporting clean, polished cobbles - along with elegant up-lighting for the façades of the grandest churches and mansions.

With this renovation, headed up by the Corporación Metro- politana de Turismo de Quito, came street signs to indicate historical sites, the renovation and re-opening of old mansions and cultural spaces, and a lifting of the ban on what colour you could paint your house. The result means that the monochrome whitewash of its oldest streets has been replaced by pastel shades more splendidly sugary than the confections sold in the many pastry shops.

After a breakfast of humitas (sweet, ground corn steamed in maize leaf) and a cup of instant coffee at one of the dark, teeny cafes that cling to the side of Calle Venezuela, we climb, lungs wheezing,to the top of the 115m tower of the 19th-century Basílica del Voto Nacional. This is Ecuador's highest church, a place as yet untouched by municipal renovations.

Inside, we wander along a makeshift, wooden plank walkway under flamboyant neo-Gothic arches and turrets and up an alarmingly rickety old stepladder to take in a view even more impressive than the church itself. Looking out over gargoyles of Amazonian jaguars and monkeys, the entire city is spread beneath us, a 30km-long, 5km-wide carpet laid between the steep green walls of Pichinicha volcano.

At the foot of the hill, at the former Naval Archives and original site of Atahualpa's palace (the last sovereign of the Incan Empire), we find the new Centro Cultural Metropolitano. At this sprawling new arts and culture complex, rotting shipping archives have been replaced by bright gallery spaces, lecture rooms and libraries along with a glass-covered courtyard complete with a chic café. Fortified by an espresso, we zip round an impressive retrospective of gaudy realist paintings by Cuban artist Julio Larraz, before seeing more homegrown paintings at the museum of the Capilla de Cantuña.

One of two lateral chapels belonging to the vast San Francisco church complex, Cantuña is weighed down by dizzy displays of gilt and gold leaf, along with an altarpiece and paintings produced by the Quito School, the 17th-century golden era of colonial-influenced local art. Here, Andean plant life provides a lively backdrop to dour traditional holy tableaux, and Amazonian animals keep company with Christ. En-route back to the hotel, we admire even more extreme Baroque fantasy at the newly renovated Compañia de Jesus church, where 2.5kg of gold leaf have been used for the repair work alone.

Our hotel, Patio Andaluz, is another recent addition. Standing between new yuppie flats, it comes with an oh-so-tasteful boutique selling handpicked Ecuadorian regional crafts at eye-watering prices and the see-and-be-seen El Rincón de Cantuña courtyard restaurant. The Spanish local cuisine served there is excellent, but we pass up dining in this evening, leaving the clientele of smart-suited business people to rub shoulders with the remaining couple of American tourists, and dash for the curtain at Teatro Sucre. At this opulent 19th-century theatre, newly renovated, we watch an energetic version of Giselle, performed by pint-sized Andean ballerinas to an audience of ladies in furs and gents in hats. At the final curtain the hats and coats all pile out into the theatre's elegant new Theatrum bistro. It looks tempting but we have a date with The Virgin.

La Virgen de Quito, the city's monolithic icon, stands like a sister to Rio de Janiero's Christ the Redeemer, wings outstretched over a sea of Andean clouds rather than the Atlantic. Driving up El Panecillo (the "little bread loaf" hill that dominates the city) our taxi driver warns us not to walk back. "Muy pericoloso," he says of the surrounding down-at-heel barrio. But like all things in new "old" Quito, this is changing. At Panecillo's summit, under the serpent-strangled skirts of the Virgin, a new restaurant has sprung up. At Pim's brasserie we eat ceviche and palm hearts, washed down with a Pisco Sour that has our altitude-addled hearts racing. The restaurant vanishes in and out of the clouds. The experience, like that of "new" old Quito itself, manages to be wild yet civilised, dynamic yet timeless.

The writer travelled as a guest of Journey Latin America (020-8747 8315; journeylatinamerica.co.uk) and Quito Metropolitan Tourism Convention (quito. com.ec). Journey Latin America offers 10 nights in Ecuador, visiting Quito and other areas, from £1,514 per person, based on two sharing, including return flights and b&b