The fish are shy and spend most of their time hiding in coral, he told me, but they emerge briefly at dusk to perform an extraordinary ritual. “They are mandarin fish,” he said. “Living jewels!”

For years, I heard rumours of divers finding these fabled fish at various locations around the western Pacific, but most of the anecdotes were tinged with disappointment: the fish were hard to find, hid under the coral or appeared just as a diver’s air was about to run out. Then I heard tell of uncharacteristically bold mandarins off an obscure island in the central Pacific.

Yap is one of the more disparate islands that make up the Pacific state of Micronesia. Most of the attention goes to nearby Palau, with its dramatic patchwork of limestone islands. (It’s actually about 300 miles from Yap, but “nearby” is a relative term in the vastness of Micronesia.) Yap, by contrast, doesn’t seem to have any naturally occurring rock on its shores — stone was once considered such a novelty there that it became the official currency. Large round “wheels” of stone, known as Rai, were imported from Palau and used as money; the tradition still persists in big transactions today, though US dollars are more practical when it comes to luggage allowance.

Tradition is important in Yap, but it is interwoven with 21st-century savvy — the teenagers I saw wearing grass skirts at a tribal dance wanted to talk internet connections and Eminem when I ran into them later at the airport.

Yap’s outer reefs are known for their current-swept coral walls and clear water. A tempting prospect, but I was going to explore the turbid waters of the inner lagoon, where hard coral grows into long fingers, forming the preferred habitat of the mandarin fish. The dive site was an enigmatic spit of land called O’Keefe’s Island. David O’Keefe was an Irish-American who was shipwrecked on Yap back in 1871, and came to dominate the local coconut trade. Quick to feed the islanders’ appetite for stone money, he imported his own stones in bulk. They were worth less than traditional Rai, but for the first time, many people were able to own money — O’Keefe effectively created a middle class. The Yapese gifted him the island as a token of appreciation.

Today, O’Keefe’s house is unrecognisable rubble, and the island is home only to mangroves, birds and insects. It is a short boat ride from the dive centre at the Manta Ray Bay Hotel, a divers’ haunt on the Yap mainland. The hotel bar was filling up as our boat set off at sunset — a party of helicopter-rescue specialists had just arrived from Hawaii, causing a frisson among a group of young lady marine biologists who had arrived a few days earlier.

As our small skiff reached the island, I registered the familiar tropical scent of moist earth and vegetation. The jungle had claimed all remnants of O’Keefe’s habitation; the air was still, the surface of the water greasily calm. We rolled off the back of the boat and entered a world of green. Outside Yap’s lagoon, the water is clear, blue and fed by currents that cross thousands of miles of Pacific. Heated by the sun to 31C, the shallow lagoon water was blooming with algae, an environment utterly removed from the dynamic waters beyond.

I descended along a bank of hard acropora coral, the same limestone-secreting animal that created the stone money millions of years ago. In open water, it develops into different shapes, determined by competing invertebrates on the reef and the movement of the water. In the stillness of the lagoon, it had grown into long fingers that rose up from a central base, creating the perfect home for small, shy fish.

Being underwater does not prevent you from enjoying a good sunset.

For a while, the glassy surface was dappled gold and orange before the dying sun completed its journey, leaving me to the thickening darkness. I switched on my torch and scanned the coral: a few transparent silver fish backed away, eyeing me with suspicion. I recognised them as a type of cardinal fish. At first sight, they seem to be gaping and snarling at you, then you realise that their mouths are full of tiny eggs, which they oxygenate by opening and closing their jaws.

I trained my torch beam on the coral head near the cardinal fish and saw a flicker of colour just below it. There were glimpses of green and gold and blue, then it disappeared behind a piece of coral. I moved further down and trained my torch at a different angle: again, flickering movement and colour, but this fish was not coming out to play.

More than 40 minutes had passed and I was quietly growling with frustration when another diver approached and signalled that I should follow him. We swam further along the reef until we reached a large coral bommie. It was by then completely dark and I could see five disembodied torch beams cutting through the water, following the progress of several tiny animals.

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