Hurghada went on to grow organically and become Egypt's first Red Sea resort, an alternative to the Valley of the Kings and overloads of Egyptology. It didn't take long for the Sheraton to be joined by a dozen other international hotels, German dive instructors and windsurf schools.

And it also didn't take long for the Egyptians to recognise this new tourism potential. Within five years, Hurghada had been overtaken in popularity on The Sinai by Sharm-el-Sheikh - and as both burgeoned into uber-resorts in the 1990s, so other sleepy villages were zoned for development.

When British-owned airline Astraeus Airways started flying to Taba, near the Israeli border, in July, 2002, the airport had no restaurant, bars or duty-free shops. Dahab is the latest to embrace tourism.

Now all three of the latest Sinai resorts have been bombed within 20 months, killing 140 people. But not once have tourist numbers faltered in that time - the resorts are now too big, the tour operators and tourism authorities too committed to pull out and the prices too cheap to ignore.

Just as the Spanish Costas shrugged bombings by the Spanish Basque separatist movement, ETA, in the 1980s, so has Egypt. Both countries are too financially dependent on tourism to allow the bombers to win. Tourism is one of Egypt’s key foreign currency earners, along with Suez Canal receipts, remittances from Egyptian expatriates and gas exports. Britons spent £293 million while on holiday in Egypt last year, compared with £177 million in 2004.

But that is not to say Egypt is complacent. The country now has the biggest tourist police force in the world, created after 58 tourists were killed by gunmen at the Temple of Hatshepsut near Luxor in November, 1997.

There is very visible protection at popular sites. The Foreign Office acknowledges that Egypt has made "considerable efforts" to improve the safety and security of tourists in the Sinai and other tourist sites. They may even insist on escorting travellers in some areas, says the FCO.

The overt security, and recognition that terrorism can strike anywhere (tourists have been targeted in bombs in Bali, Casablanca, Mombasa and Istanbul in the past four years) has patently not deterred tourists lured by cheap sunshine package holidays.

Nearly nine million visited Egypt last year to see Pharaonic sites and holiday at Red Sea resorts, including 604,000 Britons - up from 345,000 the previous year. The remarkable 75 per cent rise came despite a series of attacks during 2004.

That year, seven tourists died in three separate attacks in Cairo in April and the FCO had to upgrade its advice, on May 3, to warn that further terrorist attacks in Cairo "cannot be ruled out." The Cairo bombs were followed a bombing rampage in the Sinai in October which killed 34 people and injured 159. There were three explosions in and around the Hilton in Taba.

Then, in July 2005, three bombs exploded in Sharm al-Sheikh in the Sinai Peninsula when 63 people were killed, including 11 Britons. Yet British tourist numbers rose every quarter of 2005 - with the busiest period being October, November and December. Even the Blairs returned for their annual holiday in Sharm.

The simple reason is price. It is now possible to buy flights and a week in a five-star hotel in Taba for under £275, with drinks under £2 for a large bottle of beer, guaranteed sunshine and a range of watersports. Compare that to Dubai, the Caribbean or even the Canary Islands.

Despite the latest attack, the FCO still refuses to countenance an effective ban on tourism by warning Britons not to travel. Today's amended advice only states: "There is a high threat from terrorism in Egypt. Attacks can be indiscriminate and against civilian targets, including places frequented by foreigners."

The FCO, as with tour operators, recognises the indiscriminate nature of terror on touristsm today and is loathe to harm a country's economy without specific reason to do so. After the first Bali bombing in October, 2002, when 202 people died, the FCO "ban" on travel to the island lasted more than a year and greviously hurt the island's economy. Every million visitors to Egypt means 200,000 more jobs.

As with Spain, Turkey, Indonesia and Kenya, all countries heavily dependent on our holiday money, the balance between the economy and terror is now a fact of life. And death.

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