It’s nearly 5am, and Eric Prydz is DJing to a 25,000-strong crowd, dancing in the dry moat of a spectacular hilltop fortress in Serbia. Everyone is having it — girls in bikini tops sporting advanced mullets, boys with T-shirts off and bleached mohawks; all with trophy sunglasses at the ready. The energy is atomic, the scene epic.

“It’s like Gladiator,” whoops my Irish neighbour. Sunrise peeks through onto a clear indigo sky and, all around, the rave whistles scream and the hands reach higher. Three policemen get up and dance on the stage and the crowd explodes into cheering and clapping. Nobody quits until gone 9am. “Nothing can touch this,” says the Irish guy. “DJs don’t often get a chance to play like this — it’s just the biggest tracks all the time. Mental!

As the one-time black sheep of Europe, Serbia might not seem an obvious party destination, but the Exit festival in Novi Sad — Serbia’s second largest city — is slowly changing that. Exit’s cool credentials are attracting party people from all over Europe. At this year’s event, held last month, more than 150,000 revellers raved for four days at 27 stages, with more than 600 performances (from Franz Ferdinand and superstar DJs to top home-grown talent), all within the 17th-century Petrovaradin fortress, overlooking the Danube.

With scenery like that, hotel rooms at £30 a pop (sweaty tents are non-compulsory) and proto-Ibizan beach parties on the Danube, Exit is more like a holiday than a festival. “It’s more than a music festival,” says co-founder Bojan Boskovic, 28. “Exit has a much broader meaning.” Its roots are political — and for that, it’s more like the ideological festivals of the 1960s. The first Exit, in 2000, was a 100-day student protest, with gigs, theatre and parties, against the Milosevic regime. It proved instrumental in his downfall — hence the name Exit. For many of the “citizens of Exit”, to miss it would be like skipping family Christmas and staying in on New Year’s Eve. It’s also their only festival — there’s no festival fatigue in Serbia.

With Milosevic gone, the demos may have died down, but Exit’s political agenda is still paramount. This year’s campaigns were to liberalise the Serbian visa regime (it’s near-impossible for Serbians to travel) and to increase awareness of sex trafficking of Balkan women. Ask a first-timer about Exit’s political origins, however, and you can expect a blank expression — the politics is very much “come and get it” (from a designated tent) nowadays. Most people just want to party.

“The Serbs are seriously up on their music,” says Englishman Paxton Talbot, who has run the Dance Arena since 2001. “Milosevic turned a blind eye to club culture because it kept the gangsters — and therefore the police — up and running. It’s ironic that it became part of the mechanism that ultimately overthrew him.” The Serbs are pro-clubbers. “Balkan madness,” one local calls it. “It’s a real two-fingers attitude. Partying is our way to forget all the shit.”

And it’s one cool crowd. Okay, there is also a minority faction of overcooked cheap Russki types (Lycra, yellow hair, eye shadow), but the hot look right now is neo-1980s — asymmetric hair, chopped-up tops, wristbands, retro plastic beads — kids who look as if they’ve stepped straight out of Spitalfields.

There’s just one thing missing, though — aloofness. Within half an hour of arriving, we’ve been bought a beer, taught the Serbian for cheers and offered endless cigarettes (they smoke constantly). One guy invites us to a barbecue to see the countryside. “We’re not killers,” he says. It’s at those epiphanal sunrises that the real draw of Exit dawns: inclusivity. There might be a VIP area, but, apart from government ministers, an Olympic sportswoman and some wannabes who paid for the privilege, there’s not much going down. It’s in the techno-filled moat where togetherness hits and boundaries are dissolved. Old Yugoslavia is reunited, new friends are made — even the cops are welcome. “Exit is really a community thing,” says Srojan, 37, a designer from Belgrade. It’s something that DJ Preach felt last year: “People were unified by the music, hands in the air and screaming for more,” he says. “I felt at some point we were all from the same family.”

The buzz of Exit is spreading — MTV has moved in (it has its own stage now), the international DJs are all vying for that sunrise slot, and now, we in the UK are onto it. This year, 5,000 Brits made for a vocal minority. “It’s class,” says Dave, a student from Glasgow. “The weather’s great, the people are friendly and the line-up is wicked. What more could you want? I’m definitely coming back with more people next time.” Emma, a surveyor, says: “This place is cheaper than Peru.”

Our reputation for travelling the furthest for the maddest parties is consummate here — and you can spot the Brits a mile off. At the Exit camp site (brilliantly efficient, by the way), a British reveller is being treated for alcohol poisoning after his mates tied him to a tree and poured a bottle of vodka down his neck — all the while dressed as monks. Miodrag, who runs the on-site drugs awareness tent, says: “I’ve seen a lot of crazy shit in the tent, but the craziest shit comes from the Brits.” Amazingly, the Serbs don’t seem to mind. “British people know how to club,” says Jelena, a 27-year-old medical student. “They have really good fun.” It’s the cross-cultural exchange that the Serbs really hanker after. “Finally, it’s a chance for us to meet foreigners,” says Igor, from Belgrade. “We were isolated for 10 years.” With the current visa situation, things aren’t much better.

When it’s finally all over, at 11am on Monday morning, Senada from Novi Sad is the last to leave the site. “I am very sad,” she says, “because without Exit, we are an empty city.” So stick it in your diaries, but hurry — there’s a 5,000 cap on UK ticket sales, to keep it “multicultural”, or as the organisers put it: “We don’t want it to become a yob fest.”

www.exitfest.org

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