Bilbao

The Basque capital is being physically and culturally revitalised after years of decline, says Gerard Gilbert

In the autumn of 1983 Anne and I had shared a flat in Bilbao in northern Spain, where we were both teaching English. Spain was gearing up for its first democratic elections in nearly 50 years, but the country was still Franco-ist in its habits, and Anne and I, though only cohabiting in the strictest sense, had to pretend to be brother and sister. A bit rich, when our gloomy, cold-water flat was above the only bar in our street that wasn't a brothel.

Three months later I headed off to New York. Anne stayed, eventually marrying a local man, Inaki, and they now have a small daughter called Emma - Emma, Anne says, because it is one of the few English names which Basques find easy to pronounce.

This summer I went back to visit Anne, Inaki and Emma in their comfortable flat in Plentzia, the fishing village/resort where Bilbao meets the sea. Between 1983 and 1996 lay a revolution. Spain had had its belated version of the Swinging Sixties - an explosion of sexual, cultural and intellectual energy that had hitherto been smothered by Franco - and had now more or less caught up with the rest of Western Europe. Imagine a Pedro Almodovar working in the Spain of the Seventies - or the powerful Catholic body, the Opus Dei, tolerating decriminalising cannabis.

Bilbao in the early Eighties was in the last stages of industrial decline. Its heyday of shipbuilding, dock-working and steel-making had been in the three decades before the Civil War, a fact reflected in the gorgeous Art Nouveau and Art Deco buildings in the financial centre. The city's inhabitants consider themselves the "English" of Spain - hard-working and businesslike - though the racial origins of the Basques are a mystery. Their colouring - dark hair and pale, often blue, eyes - is more Celtic than Spanish; their language is like nothing else on Earth.

Taken as a whole, Bilbao is undeniably ugly. Not for it the elegant promenades of San Sebastian to the east or the graceful harbour-front of its western neighbour, Santander. Disused warehouses and grim housing blocks sprawl for 10 miles up the heavily polluted River Nervion towards the sea. Tall, green hills make the town centre almost claustrophobic. There has been no organised development - or not until now.

With an eye on the urban regeneration created by Barcelona, with its 1992 Olympics, and Seville, with its Expo efforts, Bilbao has become the latest Spanish city to promote itself by means of architectural projects. A new Guggenheim museum, the first in Europe, will open in the old warehouse district in summer 1997. Its design, by Frank Gehry, is a collision of nautical shapes to reflect the city's shipbuilding past. Continuing this theme is the new Congress and Concert Hall, known locally as "the ghost ship". Meanwhile the former shipyard and port area is being rebuilt on a futuristic masterplan by Cesar Pelli. But the most significant change since I was last here is the new subway system.

If any city needed an underground it is Bilbao. Designed by Sir Norman Foster, the metro system links the coastal villages, city centre and suburbs in a Y-shaped configuration, and is light and airy in a way Bilbao is not. The metro is identified at street level by glass enclosures known locally as "Fosteritos". It's smooth, quiet, clean and cheap (and runs throughout the night at weekends); it took me 40 minutes to get from Anne and Inaki's flat, which is at the end of the line, to the casco viejo, or old town - the starting place for any self-respecting night out.

The casco viejo, beautifully refurbished after severe flooding in 1983, is packed with bars and good, cheap eating places. On our Saturday night out Inaki and I moved from bar to bar, with each small glass of beer accompanied by delicious, stomach-lining pinchas - as tapas are called hereabouts. By the early hours we had reached the more expansive (and expensive) streets of the business quarter, and were downing enormous rum-and-Cokes in a severely fashionable-looking drinking hole that wouldn't have existed in 1983. The night ended in the park, swaying woozily along at a free concert given by a Zairean pop group. Bilbao is currently going through something of a GLC phase. Catch it while it lasts.

The next morning - a baking hot Sunday, with cars streaming from the city centre to the coast - I took my hangover in the opposite direction on my motorcycle. It was the same journey I had taken the evening before on Norman Foster's bright new metro. This time, though, a reminder of the region's past - and its present. The road was lined for miles with protesters, each holding a placard with the face of one of the 500 or so Basque "political prisoners" currently serving time. Mere association with a known ETA terrorist can earn a four- to six-year jail term. But tourists are relatively safe, Anne told me later. "ETA don't explode bombs in their own backyard"n

Bilbao - city essentials

Sailing there: P&O European Ferries (0990 980 980) sails from Portsmouth to Bilbao on Saturdays and Tuesdays. The journey takes 35 hours, so if you leave Portsmouth on Saturday evening, you arrive in Bilbao on Monday morning. A five-day return costs pounds 105 per person, including a berth in a cabin, plus pounds 100 if you bring a car. A standard return costs pounds 465 for two people plus car.

Flying there: British Airways (0345 222111) operates daily from Heathrow to Bilbao. The lowest return fare is pounds 178, including tax.

Staying there: Spanish National Tourist Office, 57 St James's Street, London SW1 (0171-499 0901) can advise on a range of accommodation along the coast.