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Lunch hadn't been this relaxing for ages. On one side of the terrace was the sea, deep blue and sparkling; on the other was the restaurant, almost hidden by a huge fig tree surrounded by irises.

On the table was a plate of perfectly grilled sardine-sized fish, a bowl of salad and a glass of a local dry white wine: the ideal finale to a sunny morning of gentle sightseeing. My first day on Bulgaria's Black Sea Riviera was already a good one.

The omens had been positive from the moment I'd opened my bedroom curtains and spotted two dolphins cruising in the bay below.

It wasn't what I'd expected at all. When I had started my search for a holiday with guaranteed summer sun, Bulgaria had caught my eye mainly because it seemed so reasonably priced.

Wedged between Greece and Turkey, and just three hours flight away, it seemed too good to be true. I was worried that I'd end up in a bargain basement version of the Costa del Sol.

My fears were misplaced; there are large new resorts along the 125-mile coastline, but I wasn't in one of them.

I was staying in the modern Hotel Festa Panorama in the newer part of the small seaside town of Nessebar near Burgas, perfectly positioned between the five-mile curve of golden sand backed by the cheek-by-jowl hotels of Sunny Beach resort and the old part of town.

The hotel is looking neat and chic after a change of ownership and decor over the winter, and I was tempted to spend my first morning by the large pool and practising the odd word of Bulgarian (mainly 'thank you') on the staff.

However, all the guidebooks agreed that Old Nessebar is one of the Black Sea coast's loveliest spots, so I headed out to see if they were right. They certainly were.

Squeezed on to a peninsula no more than half a mile long and barely a quarter of a mile wide, Old Nessebar is a delight - cobbled lanes, Byzantine churches and weathered woodand-stone houses wrapped in the remains of its defensive ramparts.

I started my morning of explorations outside the walls, walking through the fish market to the harbour where I watched fishermen painting their boats while house martins swooped above.

From there, a short flight of stairs up into the heart of the town brought me to the best-preserved of Old Nessebar's churches, Sveti Stefan.

From the outside, it was charming, but not striking. So I was unprepared for the lavish interior covered in ornate 16th-century murals. I felt so dizzy with the finery of it all that I found the word for 'beautiful' in my phrase book and tried it on the woman in the ticket office, who agreed it was 'hubavo'. Back in the sunlight, I put away my guide and map and just wandered around the streets.

There were more churches in various states of repair and beauty, though not as many as the 40 the town once boasted. In one, almost a ruin, a choir was giving a free concert. I stumbled on the remains of a sixth-century bathhouse, built when the town was already more than 1,700 years old.

Mostly, I strolled down inviting lanes lined with graceful houses until I found myself at the end of the peninsula in time for my delicious alfresco lunch at Neptun restaurant.

After that, spending the rest of the afternoon lazing at the hotel seemed in order. I was soon stretched out on a sunbed with a good book.

And for a day or two, that was more or less that (one of the joys of an all-inclusive holiday).

I wasn't completely idle, of course. I managed to find the spa in the basement and treated myself to a massage, sadly not included, but half the price it would have cost at home.

I went for a slow walk around new Nessebar and found a proper local supermarket where I bought bars of sweet-scented rose soap and boxes of lokum (Turkish delight), all Bulgarian made and cheap.

I even made it on to the soft, clean sand at Sunny Beach (Blue Flag standard, no less). The sea wasn't quite warm enough for a dip and the resort's attractions ( fairground rides and burger joints) left me cold, too.

After a healthy dose of relaxing, I longed to see more of the countryside. I made a full-day outing north-west of Nessebar, with mountain villages, striking rock formations and nature reserves.

The highlight was sleepy Zheravna, an enchanting highland village surrounded by flower-strewn meadows.

I could have walked around its cobbled streets for hours, admiring the 17th- century houses and colourful wool rugs made by the talented local craftspeople.

We were lucky enough to see some of the landscape from an unusual angle, thanks to the chairlift that runs from the mountain resort of Karandila down through the Blue Rocks Nature Reserve to the small town of Sliven below.

Dangling an impressive distance above a steep slope may not be everyone's idea of a good time, but I loved it. All I could hear was birdsong.

What I'd imagined as the Costas for the cash- strapped turned out to be so much more.

As if to prove my point, back in Nessebar, a building near the old gateway turned out to be a small Archaeological Museum filled with treasures from the town's 3,000-year history: Thracian coins, Greek jewellery and medieval icons among them.

You don't get that in your average resort.

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