Ithaca is an island that likes to keep its secrets. The drive to the capital, Vathy, from the tiny harbour, revealed dramatic landscapes of lush green peaks and scattered, sleepy hamlets. Beautiful, undeveloped – it was everything I had expected; a paradise for walkers and those in search of a tranquil week or two beneath the Greek sun. Even when we arrived in Vathy, a port with a population of 3,000, it still seemed as if we were set for a few days of snoozing on beaches and strolling in the hills.

So it was something of a surprise to find myself, later that evening, perched at a chrome-topped bar, being persuaded into a second Cosmopolitan.

My husband Rob and I had happened on Manu, a bar tucked away in the back streets, on a postsupper stroll. We were surrounded by holidaying Athenians and an atmosphere that felt more like Manhattan. “Oh, you’re staying uptown?” said the owner, when we told him about the boutique hotel we were holed up in. “Nice. We’re downtown here, of course, where it all goes on.”

Downtown Vathy. It’s not a phrase I expected to hear on Ithaca. But perhaps our hotel should have given me some clue that there is more to the island than pastoral bliss.

The Perantzada is converted from a former military school, one of the few buildings left standing in Vathy after the 1956 earthquake. It was one of a new breed of Greek boutique hotels, a product of the slow realisation that there was a middle ground between basic-but-clean apartments and slick-but-soulless large hotels.

The concept doesn’t always work. Pared-down minimalism can come as a bit of a shock in the middle of a Greek fishing village. We had just spent a few days at the Emelisse, the Perantzada’s sister property on Cephalonia, and found that the sleek design almost eradicated any sense of being in Greece. So it was with a little trepidation that we pulled up at the Perantzada and walked up the whitewashed steps into reception.

We needn’t have worried. The hotel is a delight. Wide wicker chairs and a high-sided cream sofa sat on a small terrace that overlooked Vathy; our room was charming. Upstairs, the breakfast room kept a period feel; a large 19th-century dresser was crammed with books and magazines, a tiny bar groaned under wedges of homemade cake.

Yet it still felt reassuringly Greek. It was small enough – only 19 rooms – and the pool and terrace, with views across Vathy harbour, meant we could spent the day lazing around the hotel before venturing into town in the evening.

Ithaca had seemed a strange location for a chic design hotel, but when the sun set on Vathy it became easier to understand. The harbourfront seethes with life; in July and August the pavement cafés and restaurants are crammed with holidaying Athenians and the moneyed sailing set, at other times the island attracts a bohemian crowd. In the UK, Ithaca may be known as a walkers’ destination, but for Greeks it is almost an artists’ colony. The backstreets of Vathy are filled with quirky boutiques and galleries, windows full of postcards advertising studios to rent.

Tradition and modernity seem to coexist happily.

Before our cocktails in the matt-and-chrome Manu, we had supper in a local restaurant, sitting at one of the rickety wooden tables. The waiter scoffed at our request for menus and led us inside to select from bubbling vats of lamb stew and chicken stuffed with herbs. We thought he didn’t speak English, until his eyes alighted on Rob’s mobile phone and they embarked on a long discussion on the merits of Vodafone over Nokia.

Strolling back at 2am to our “uptown” hotel, we felt we had discovered a different side to an island that is usually perceived as a backwater. I had expected the Perantzada to seem out of place, but it fitted perfectly into a scene I simply wasn’t aware of. The new wave of places to stay are being opened by Greeks who know the islands in a different way from how we perceive them. Beyond Vathy, the tiny villages that dot the island’s mountainous outline remain true to our perception of an unspoilt Greek retreat. But to discover the bohemian heart of the island, the Perantzada is a pretty good place to start.

Greek beauties: best of the boutiques

Perivolas, Oia, Santorini

Converted from caves that were once the homes of fishermen and farmers, Perivolas offers traditional whitewashed decor broken up with splashes of colour – lavender cushions, glass vases in azure and scarlet. At night the place is dotted with candles to show off the glorious sunsets. A B&B week is from £1,370pp including flights and transfers through Carrier (0161-491 7650, www.carrier.co.uk).

Bratsera, Hydra

This former 19th-century sponge factory won an award for its redesign, which kept the wooden and tiled floors and heavy ceiling beams and matched them with wrought-iron bedsteads and cream furnishings. The colonnaded pool is ideal for lazy days, and the buzzy harbour at Hydra Town is a minute’s walk away. B&B doubles from £89 (00 30 22980 53971, www.bratserahotel.com).

Marco Polo Mansion, Rhodes Town, Rhodes

A 16th-century Turkish house that has been opulently restored with a 400-year-old timber ceiling, elegant communal rooms with tiled floors and red ochre walls. The house has three bedrooms, gauze-draped four-posters, rich carpets and antique furniture. There are four “garden rooms” and pretty terraces leading to a bougainvillea-clad garden. B&B doubles from £61 (22410 25562, www.marcopolomansion.web.com).

Emelisse, Fiskardo, Cephalonia

The Emelisse is a short walk from the harbourfront at Fiskardo. Built directly above the sea, the pool area has views across to Lefkada. Sofas, teak loungers and elegant oriental touches give a luxurious air. But the rooms are pared down to the point of bleakness, and although there is an undeniable sense of style, it is at the cost of any kind of authentic Greek feel. A B&B week is from £889pp including flights and transfers through Sovereign Luxury Holidays (0870 3661626, www.sovereign.com).

Need to know

Annabelle Thorpe travelled with Inntravel Authentic Greece (01653 617906, www.inntravel.co.uk), which offers a week’s B&B at the Perantzada from £618pp, including flights from Gatwick to Cephalonia and taxi transfers, but not ferry fare.

Reading: Ionian Islands (Rough Guides, £10.99).

Further information: Greek National Tourist Office (020-7495 9300, www.gnto.gr).

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