Bahrain was the first Gulf state to discover petroleum, in 1932, and with the lure of tax-free salaries and a lively social life it has held a diverse community of expatriates ever since.

A trading post and fishing community for thousands of years, nowadays - with its crude supplies running short - it refines Saudi oil. It has also emerged as the world's centre of Islamic banking, and more than half of the country's workforce comes from overseas.

According to the latest figures available from the Foreign Office, around 7,000 British nationals work in the state, a fraction of the population of 235,000 immigrants, which accounts for more than a third of the Bahraini population.

Of those, many come from Pakistan and Thailand, as well as 20,000 Filippinos, many of whom work in the state's burgeoning construction industry.

Made up of 33 islands and joined to Saudi Arabia by the King Fahd Causeway, a 25km-long bridge built in 1986, Bahrain has been ruled by Al-Khalifa family of Emirs since the late 18th century. Although political parties are banned, the state become a constitutional monarchy with an elected parliament in 2002 and is known as one of the more stable and open societies in the Gulf.

"Bahrain very much has its own identity," says Lyn Collins, who serves on the committee of the British Bahrain Friendship Society and takes tours to the island. "Places like Abu Dhabi and Dubai have very few truly local people -- when I was growing up in Bahrain in the 1950s those places didn't really exist, whereas Bahrain has been established for hundreds of years."

"Many Bahrainis and expats work in Saudi Arabia, so every weekend the causeway is full of people coming back to the island to relax because it has a much freer regime: lots of hotels, a lovely green golf course, expat clubs. If you want food of any nationality, you can find it in Bahrain."

With Bahraini oil forecast to run out within 15 years, the royal family has undertaken vigorous attempts to diversify the island's economy. More than 10 per cent of GDP is now provided by tourism, and the proximity of Saudi Arabia has made the capital, Manama, the centre of off-shore banking in the Gulf. Twenty-eight Islamic banks have their headquarters in the city.

Like Dubai, Bahrain also has little fear of remaking its environment. Known once as the "island of a million palm trees", Bahrain is now the scene of major building developments, including the twin-tower Bahrain World Trade Center, due to be finished this summer, and a $3 billion land reclamation project, which will create a new 11 million square metre island in the shape of a seahorse to the northeast of the capital.

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