IT WAS the first full evening of our holiday in Montenegro, and we were sitting at a beachside tavern sipping local chardonnay and nibbling at slices of smoked ham. My wife Kate had ordered the fresh fish of the day, while nine-year-old Adam had gone for a chicken kebab and I had chosen mussels buzara, the local equivalent of moules marinières.

At first the waiter told me they were out of mussels, but then his eye was caught by a fisherman walking along the promenade with a net full of them, straight off the boat. Two minutes later, the deal was done and the waiter returned excitedly to tell me that I could have the freshest mussels I have ever eaten — and all for less than £4.

Until the 1980s, when it was still part of Yugoslavia, this was a popular sun-and-sand destination, then the Balkans flared up and the Montenegrin Army was sent into Croatia.

Today, Montenegro forms the lesser-known half of the Republic of Serbia and Montenegro, though it may break away in a referendum scheduled for 2006. Already it has adopted the euro as its currency and started to lobby for European Union membership.

Meanwhile, the beaches, which once thronged with British flesh, are crowded with Serbs who feel more welcome here than anywhere else in the Adriatic, plus the Russian nouveau riche and Italian families who hop across on the ferry for the weekend.

Montenegro is being hyped as the “new Croatia”, and after holidaying in Croatia last summer and Montenegro this year, I can say that the latter really scores for families in the quality of its beaches.

What passes for a beach in Croatia often turns out to be no more than a rocky ledge with a couple of parasols and sharp pebbles which cut into children’s feet, whereas Montenegro has proper beaches all the way from the Croatian border to the Albanian one.

Now don’t get me wrong. This is not Cornwall or north Norfolk, with expanses of golden sand the size of a football pitch. Don’t bother to pack the buckets and spades: the beaches have almost as much shingle as sand. But at least you can wade into the water without needing plastic sandals to protect yourself from jellyfish and jagged rocks.

Our base was the Hotel Maestral in the seaside village of Przno, little more than a handful of stone cottages turned into tavernas and bars. The hotel was recently bought up by a Slovenian chain, which has refurbished all the rooms and invested heavily in a new casino and spa – where Kate and I had a Thai massage at £33 apiece.

In the mornings, before it got too hot, Adam and I would play tennis, and later we would cool off in the infinity pool, with views across the sea to the island of Sveti Nikole and the walled town of Budva. There was a playground for younger children, and a bridge leading to a private beach with free loungers and umbrellas for hotel guests.

Our favourite way of getting into the water was by hiring a pedal-boat which we would take out into the open sea. Alongside the hotel beach was a lively public stretch, from which we could swim out to a rocky islet crowned by a ruined house.

One downside of holidays in the Balkans is that many hotels require you to stay half-board, forcing you to pay for a bland buffet supper even if you choose to eat out at local restaurants. At the Maestral, Holiday Options has negotiated an excellent arrangement called Bon Appetit, where you eat in on four nights of the week and dine out on the others. This gives you just enough time to try all the fish restaurants on the promenade, and enough money to splash out on an extra bottle of the strong local Vranac red wine.

A ten-minute walk from Przno takes you to the Queen’s Beach, so called because the Serbian royal family used to have its summer palace near by (it is now a hotel).

This is a beautiful spot with a horseshoe of sand and a bay enclosed by wooded cliffs. The sand shelves gently into the sea, making it safe for children, and if you swim out far enough you have wonderful views of the island of Sveti Stefan.

Sveti Stefan is the flagship of Montenegrin tourism, a fortified island fishing village built in the 15th century, abandoned in the 20th and transformed by President Tito into a luxury hotel whose guest list included Sophia Loren and Sylvester Stallone. It is joined to the mainland by a narrow isthmus with a beach on either side. We arrived there after a shady walk through the olive groves, to find a conference of Balkan politicians taking place. Everywhere we looked there were security guards in dark glasses and menacing black suits.

Day-trippers are supposed to pay £4 to look around but we slipped through the gateway unchallenged and spent an hour strolling its terraces and climbing to the chapel at the summit.

Despite its glamorous reputation, Sveti Stefan is in urgent need of renovation; the state-owned hotel is up for tender and the smart money is on Aman Resorts turning it into a £350-a-night boutique resort with just 45 suites instead of the existing 118 rooms.

Montenegro has big plans for development. A British company is building a golf course beside Lake Skadar. The World Travel and Tourism Council is forecasting 10 per cent growth a year for the next ten years, making it the world’s fastest-growing tourist destination (it topped the list for 2004 and 2005). In a few years, Montenegro will be hip, crowded and expensive, but for now it has a stark, dramatic beauty and one of the last unspoilt coastlines in the Mediterranean. Go while you can.

Page 2: Need to know and places to go ()

Need to know

Getting there: Tony Kelly and family travelled with Holiday Options (0870 4208372, www.holidayoptions.co.uk).

A week at the four-star Hotel Maestral costs from £559 per adult and £447 per child aged 2-11, including return flights on Croatia Airlines from Gatwick to Dubrovnik, transfers and accommodation on a Bon Appetit basis (half board for four nights, B&B three nights). Departures from regional airports to Dubrovnik, or from Heathrow to Tivat, available at a supplement. Holiday Options car hire from £219 per week.

Reading: The excellent Bradt Guide to Montenegro (£13.99) is the only English-language guidebook available and is strong on the country’s history, culture and wildlife.

Six family days

Follow the walkway around the medieval walls which encircle the old town of Budva — now fully restored following an earthquake in 1979 — then climb to the top of the citadel and stroll along the promenade with an ice-cream.

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