Ísafjörður is a small town deep in the heart of the Western Fjords of Iceland. Best known to Icelanders for it's fishing industry, a popular winter sports festival called Ski Week and, since 2004, hosting the European Swamp Soccer championships. Perhaps the only sport you are encouraged to play drunk.

It is also home to the world's only harbour master and alternative music festival director, Gudmunder Krstjansson, official age, 51. Known affectionately around town as 'Muggi', he boasts movie-star dimples, a leather jacket (when not in his fluorescent work get up) and a past as a karaoke legend in Malaysia - where they christened him, Muggi. Every bit the 'rock and roll captain', he and his pop star son, Mugison, known to friends and family as Orn Elias Gudmundsson, are turning Ísafjörður into one of the most unlikely destinations on the global festival circuit.

"Raaargh" screams Oli Popp, veins popping, guest frontman for Grjóthrun í Hólshreppi. It's lunchtime on Saturday, mid way through the second day of events at Aldrei For Eg Suður's largest site yet, a temporarily vacated palette warehouse on the edge of the port. Three trawlers, which docked early so that the sailors could come to the festival, can hardly be seen through the blizzard raging outside. The smell of fish soup tries to warm the air. It's -2C. The body heat of 900 odd revellers is only keeping things marginally warmer. "Raaargh", Popp screams again.

No one, from the crush of eight-year-olds moshing at the front to the silver-haired veterans manning the bar seem to know or care what he's on about. No doubt it's important however. His backing band being comprised of the doctor, mayor and policeman from neighbouring towns. "We are the most political band ever to come from the West Fjords", reads their mission statement in the festival literature. "We are all very interested in the improvement of roads between Ísafjörður and Bolungarvík, and in all of Vestfirðir for that matter".

And they have a point. Ísafjörður is an unbelievably remote place, with the lowest number of foreign visitors in the country. Blizzards regularly ground planes at the local airport, leaving it accessible only via a seven hour road trip over, if snow permits, otherwise round, sheer mountains that hug the seven intervening fjords between it and Reyjkavik.

Despite being, as it's organisers romantically and not that inaccurately claim, 'at the end of the world', this year over 130 bands applied for what is meant to be only 20 slots over one day. By 'accident' (or rather "because Mugison can only say, yes" mutter several festival 'committee' members) the line-up swelled to 40 acts over two days. With headliners ranging from Iceland's current best-seller, 23-year-old blues rocker Lay Low to a local all-male choir (who sounded like thunder and looked like an Old Spice advert). There were even spin-off events including a concert by a folk singer, in swimsuit and lipstick, piped underwater at the local pool.

On the Sunday after the festival, just before preparing a meal for the hundred-odd band members, Mugison, sat under a Page 3 calendar and portrait of a trawler in the harbour office, is explaining how it all came about. He and his father were in London in 2003, where Mugison was signed by Herbie Hancock to his Accidental label and studying music engineering.

"It began as a joke,” says Mugison. “We were at an all-day event at that nice snob factory, the ICA. And thought why not do something like it back home, where local workers would be the main attraction and the biggest names in Icelandic music would support them?"

The festival came together in 2004, after both had permanently returned from living abroad. Mugison to set up a studio somewhere affordable and Muggi, a sailor and engineer, to be near his growing family (there are now two grandsons, Mini Muggi and Mini Mini Muggi). "We had no funds, accommodation or venues, and yet all of sudden we had 20 bands arriving,"recalls Mugison, his father, next to him, grinning at the memory.

There are only 300,000 people in Iceland, yet it has always punched above its weight musically, as has Ísafjörður with it's music school, founded in 1911, being the oldest in the country. Closed for several years due to the harsh weather, it reopened in 1948 and since then has commanded such respect that Vladimir Ashkenazy conducts the Icelandic Symphony Orchestra there next month.

A quick tour by its director reveals over eight grand pianos, a room dedicated solely to accordians, another for electric guitars and another for exotic stringed instruments, including a lute and several African koras. Not bad for a town with a population of 3,300. Even at the local shop, music mania is in evidence, with guitar strings on sale between the condoms and Haribo sweets.

Nevertheless, it takes a particular charisma to get people to perform on the bitter fringes of the Arctic Circle, with no planned accommodation or fee. And Mugison, with his Dad running a close second, is your local hero incarnate. Having earned his stripes abroad, he has returned as a popular ring master of Iceland's new folk-inspired pop scene, known semi-affectionately by the former punk guard as the 'Cute' generation. A name the chunky wool-knit sweater brigade hate, but that well fits this new generation of laid back, socially-responsible characters.

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