Madrid became Spain’s capital simply through its geographical position at the centre of Iberia. When Felipe II moved the seat of government here in 1561 his aim was to create a symbol of the unification and centralization of the country, and a capital from which he could receive the fastest post and communications from each corner of the nation. The site itself had few natural advantages - it is 300km from the sea on a 650-metre-high plateau, freezing in winter, burning in summer - and it was only the determination of successive rulers to promote a strong central capital that ensured Madrid’s survival and development.Nonetheless, it was a success, and today Madrid is a vast, predominantly modern city, with a population of some three million and growing. The journey in - through a stream of concrete-block suburbs - isn’t pretty, but the streets at the heart of the city are a pleasant surprise, with pockets of medieval buildings and narrow, atmospheric alleys, dotted with the oddest of shops and bars, and interspersed with eighteenth-century Bourbon squares. By comparison with the historic cities of Spain- Toledo, Salamanca, Sevilla, Granada - there may be few sights of great architectural interest, but the monarchs did acquire outstanding picture collections, which formed the basis of the Prado museum. This has long ensured Madrid a place on the European art tour, and the more so since the 1990s arrival - literally down the street - of the Reina Sofía and Thyssen-Bornemisza galleries, state-of-the-art homes to fabulous arrays of modern Spanish painting (including Picasso’s Guernica ) and European and American masters.

As you get to grips with the place you soon realize that it’s the inhabitants - the madrileños - that are the capital’s key attraction: hanging out in the traditional cafés or the summer terrazas, packing the lanes of the Sunday Rastro flea market, or playing hard and very, very late in a thousand bars , clubs, discos and tascas . Whatever Barcelona or San Sebastián might claim, the Madrid scene, immortalized in the movies of Pedro Almodóvar, remains the most vibrant and fun in the country. The city is also in better shape than for many years past, after a £500-million refurbishment for its role as 1992 European Capital of Culture and the ongoing impact of a series of urban rehabilitation schemes - funded jointly by the European Union and local government - in the older barrios (districts) of the city. Improvements are also being made to the transport network, with extensions to the metro, the construction of new ring roads and the excavation of a series of road tunnels designed to bring relief to the city’s overcrowded streets. The authorities are even preparing a bid for the 2012 Olympics.

Madrid’s main sights occupy a compact area between the Palacio Real (Royal Palace) and the gardens of El Retiro . The great trio of museums - the Prado, Thyssen-Bornemisza and Reina Sofía - are ranged along the Paseo del Prado, over towards the Retiro. The oldest part of the city, an area known as Madrid de los Austrias after the Habsburg monarchs who built it, is centred on the gorgeous, arcaded Plaza Mayor , just to the east of the Palacio Real.

If you have very limited time, you might well do no more sightseeing than this. However, monuments are not really what Madrid is about, and to get a feel for the city you need to branch out a little, and experience the contrasting character and life of the various barrios . The most central and rewarding of these are the areas around Plaza de Santa Ana and c/Huertas , east of Puerta del Sol; La Latina and Lavapiés , south of Plaza Mayor, where the Sunday market, El Rastro , takes place; and Malasaña and Chueca , north of Gran Vía. By happy circumstance, these barrios have some of Madrid’s finest concentrations of tapas bars and restaurants.

Monasterio de las Descalzas Reales
A fascinating hoard of art treasures hidden away in the centre of Madrid.

El Palacio Real
At the heart of the city is the sumptuous Palacio Real, which claims more rooms than any other European palace.

A night on the tiles
Start late at a bar, then on to a club and try to make it into the early hours before collapsing over chocolate con churros .

El Rastro
Take a Sunday stroll from Plaza Mayor through Madrid’s shambolic flea market, El Rastro.

A visit to the Prado
The Goya, Velázquez and Bosch collections alone make the trip to one of the world’s greatest art museums worthwhile.

Guernica
See this icon of twentieth-century art at the Reina Sofía museum.

Urban oases
Escape from the bustle of the city to the Retiro or the shady oasis of the nearby Jardines Botánicos.

Tapas
Sample the specialties as you hop from bar to bar in the Huertas district.

Verbenas
Join in with the traditional August verbenas in the barrio of La Latina.

La Ermita de San Antonio de la Florida
Visit Goya’s magnificent frescoes in situ .

Look out for fiestas whenever you’re in Madrid: there are dozens, some of which involve the whole city, others just an individual barrio . The more important dates are listed below.

Also well worth checking out are cultural festivals organized by the city council, in particular the Veranos de la Villa (July-Sept) and Festival de Otoño (Sept-Nov) concerts (classical, rock, flamenco), theatre and cinema. Many events are free and, in the summer, often open air, taking place in the city’s parks and squares. One of the nicest venues is the courtyard of the Antiguo Cuartel del Conde Duque (Métro: Ventura Rodríguez), where weekly flamenco recitals are held. Annual festivals for alternative theatre (Feb), flamenco (Feb), dance (mid-May to mid-June), photography (mid-June to mid-July) and jazz (Nov) are also firmly established on the cultural agenda. Full programmes are published in the monthly En Madrid tourist hand-out.

JANUARY

5   Cabalgata de los Reyes (Cavalcade of the Three Kings); an evening procession through the city centre in which children are showered with sweets.

FEBRUARY

Week before Lent   Carnaval - is the excuse for a lot of partying and fancy-dress parades, especially in the gay zone around Chueca. The end of Carnaval is marked by the bizarre and entertaining parade, El Entierro de la Sardina (The Burial of the Sardine), on the Paseo de la Florida.

MARCH/APRIL

Easter Week   Semana Santa is celebrated in Madrid, but with less spirit and processional activity than in Toledo.

MAY

2   Fiesta del Dos de Mayo in Malasaña and elsewhere in Madrid. Bands and partying around the Plaza Dos de Mayo - a bit low-key in recent years, having been the funkiest festival in the city during the 1980s.

15   Fiestas de San Isidro - Madrid’s patron saint - spread for a week either side of this date, and are among the country’s biggest festivals. A nonstop round of carnival events: bands, parades and loads of free entertainment, usually centred around Plaza Mayor. There’s a band each night in the Jardines de las Vistillas (south of the Palacio Real), and the evenings there start out with chotis (a dance typical of Madrid) music and dancing. The fiestas also herald the start of the bullfighting season.

JUNE

13   Fiesta de la Ermita de San Antonio de la Florida ; events around the church and in the adjacent Parque de la Bombilla.

17-24   Fiestas de San Juan ; bonfires and fireworks in El Retiro.

JULY

9-16   La Virgen del Carmen ; local fiesta in Chamberí barrio , north of the city centre.

AUGUST

6-15   Castizo fiestas . Traditional fiestas of San Cayetano, San Lorenzo and La Virgen de la Paloma in La Latina and Lavapiés barrios . Much of the activity takes place around the Plaza de la Paja and the Jardines de las Vistillas.

DECEMBER

31 New Year’s Eve ( nochevieja ) is celebrated at bars, restaurants and parties all over the city, and there are bands in some of the squares. Puerta del Sol is the customary place to gather, waiting for the strokes of the clock - it is traditional to swallow a grape on each strike.