The scent of grilled fish drifted across the quayside as fishermen arrived on their trawlers and turned them into impromptu barbecues of sardines, tuna and squid.

Farmers from the Dalmatian countryside set up stalls selling olive oil, sheep’s cheese, herb brandy and home-made wine. As the Sun went down everyone gathered on the waterfront, singing and dancing to traditional klapa (a cappella) groups by the light of the full Moon.

Zadar, set on a narrow peninsula surrounded by the Adriatic on three sides, is the forgotten city of Croatia. Bombed almost to oblivion during the Second World War, and besieged by Serb forces during the 1990s war, it has suffered greatly down the years.

But the capital of northern Dalmatia is enjoying a renaissance, with new hotels, bars and clubs and a fun-loving spirit that is on display at the Night of the Full Moon festival each summer.

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BACKGROUND

• Zadar and the Croatian lighthouse

• Plain sailing around Croatia

• Istria: food garden of Eastern Europe

• Swimming around Croatia's islands

• A new breed of Croatian villa retreats

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I first went to Zadar two years ago and was instantly seduced by its easygoing café culture and intriguing blend of ancient and modern architecture.

I returned telling anyone who would listen that I had found the perfect Croatian city for a weekend break; all it needed was cheap flights and boutique hotels. Well, now it has both.

Ryanair flies there in summer and Hotel Bastion opened a year ago in a 13th-century fortress on the city walls.

At times the hotel veers towards the kitsch rather than the trendy minimalism that you expect, but it makes an elegant retreat in the heart of the city, with a terrace restaurant and basement spa that has a sauna and Turkish bath.

Cross the road one way and you come to Arsenal, a magnificent 18th-century armoury where the Venetian fleet once stopped for repairs, imaginatively restored as an art gallery, live music venue, nightclub and upmarket shopping mall.

Cross the other way and you arrive at The Garden, possibly the coolest bar in Croatia. It all goes back to 2004, when a British music producer, Nick Colgan, stumbled across the derelict walled garden of the Hotel Belgrade while holidaying in Croatia with his family.

At the time, almost nobody went to Zadar, but Colgan took a gamble by moving there with his wife, Charlotte, and young children, and bringing a taste of Ibiza-style chic to Dalmatia.

During the day people lounge on sofas and read the papers in shady cabanas. At night the volume is turned up as gorgeous couples sprawl out on big cushions, sipping cocktails to an electronic soundtrack.

The Garden has become so successful that it now has a beach club, with an annual garden festival in the nearby resort of Petrcane.

As you look out over The Garden walls, you might just glimpse a boatman rowing passengers across the harbour from a jetty outside the old Maraska liqueur factory. Maraschino (cherry brandy) has been made in Zadar for more than 200 years, but the original factory has outlived its purpose and is due to be converted into an hotel. If the boatman continues to ply his trade, guests will be ferried to The Garden for the princely sum of 4 kuna (50p).

The cocktails at The Garden may be expensive but across the peninsula, not far from the remains of the Roman forum, the best show in town is free. This is the Sea Organ, designed in 2005 by the Croatian architect Nikola Bašic.

It consists of a series of stone steps on the promenade leading into the sea, with underwater pipes and chords played by the waves to create an ever-changing symphony of Nature. It is the most imaginative, playful and enjoyable piece of modern architecture I have seen.

As you sit on the steps of the Sea Organ the islands beckon. Twice a day, even in winter, the ferry calls in at Ošljak, a tiny wooded island with a population of fewer than 50 people, every one of whom has the same surname. There are no shops and no cars, just a handful of houses and a small summer guesthouse run by Davor Valcic, from a family of fishermen.

It took me less than an hour to walk around, passing a 7th-century chapel, ancient windmills and a Second World War concentration camp, breathing in the scent of capers and listening to the crickets and the gently lapping waves.

It seemed like the most peaceful place on Earth and I could have stayed there for days. But across the water was Zadar, the city beneath the Velebit mountains, getting ready to party all night by the light of the full Moon.

Need to know

Ryanair (0871 2460000, www.ryanair.com) flies from Stansted to Zadar three times a week from April to October, from £10 return.

Hotel Bastion has double rooms from £145 in summer (www.hotel-bastion.hr).

The Garden (www.thegardenzadar.com) is open from late May to mid-September, daily 10am-1.30am; Arsenal (www.arsenalzadar.com) is open all year, daily 7am-2am.

The Night of the Full Moon festival usually takes place on July 6.

Guidebook: Visitors’ Guide to Croatia (Time Out, £4.99).

Croatian National Tourist Office (020-8563 7979, www.croatia.hr). Zadar Tourist Board (www.visitzadar.net)

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