I'd been told that Tallinn was beautiful but it's hard to get the measure of a place when you touch down at midnight and there's little to see but empty streets and worn-out shop fronts. "Why you come here?" snorts the taxi driver. "Tallinn not good."

Oh dear. I'm in the Estonian capital on a recommendation and was led to believe all would be charming. I sit back in the seat and sigh, watching my breath almost freeze in front of me. It feels a bit like no-man's land.

Then, out of nowhere, the outline of medieval turrets rises above the city's old quarters as arterial roads give way to 13th-century cobbles - the reason people come here becomes obvious.

Only 15 minutes from the airport and you're in a Baltic fairytale. In fact, Tallinn's almost Disney-like old town, thought to be the best preserved in the world, was rightly declared a UNESCO world heritage site in 1997.

The place might have been designed with Christmas in mind, its architects intent on creating a city that comes into its own when afternoons draw in and there's an excuse to festoon buildings in festive lights.

Unsurprisingly, the large Town Hall Square hosts a vast Christmas market that runs for 40 days from 29 November to 7 January. There's a sense of stepping back in time as you mooch around the alleys, strolling past gabled houses and half-hidden courtyards.

Cavernous cafés fogged by steaming milk lurk enticingly on every corner; and if you want to see the view that adorns every box of chocolates, walk up to the elevated vantage point and take in a panoply of russet-coloured rooftops, Gothic spires, the vertiginous TV tower built for the 1980 Moscow Olympics and the harbour ferrying in Finns from Helsinki, an hour across the Baltic Sea.

The following morning I'm met at my hotel by a charming local couple, Eva-Maria and Indrek - young entrepreneurs in fur hats, armed with a wealth of local knowledge.

Booked on a personal tour covering the city's Soviet legacy, I fold myself into their Eighties Lada and am shown the surviving landmarks of that dubious epoch. Estonia gained its independence in 1992 but spent most of the 20th century within the Soviet Union.

We pass the old KGB headquarters where unfortunate individuals were shot or sent to exile in Siberia; visit the grisly, derelict carcass of Paterai, a waterfront prison; plus I'm shown around a makeshift statue graveyard that houses the toppled remains of giant granite Stalins.

I also spend a strangely thrilling hour firing guns with real ammunition at an indoor shooting range. Instructor Tonu looks as deadly as the cartridges littering the floor but his patient instruction soon has me wielding an AK-47 like a pro. I can't say what smelt the most - the gunpowder or the whiff of testosterone.

Back in the tank, Eva-Maria tells me she is the daughter of Harry Egipt, perhaps the country's most famous film producer.

In the Seventies and Eighties, his all-singing, all-dancing TV commercials sold Soviet housewives everything from washing powder to minced chicken. Genius examples of their type, they're as kitsch and wildly dated as you might imagine, and recently revived for the title credits of Borat.

As we sit watching them on a laptop, it's obvious how far this country has come. Tallinn is a city on the rise, with an educated workforce, high technological standards and an overwhelming desire to be modern. Estonia also wants to be known as a Nordic state rather than an eastern European country, and the proliferation of cool blondes manning hotel receptions and world-class restaurants reflects this.

While not every girl here is quite as desirable as local model Carmen Kass, stag parties still descend on the city looking for beer, love and everything in between.

If it's wenches you're after, the only compulsory thing to do in Tallinn is eat at Olde Hansa, a sort of medieval Hard Rock Café that swaps burgers for bear steaks and employs staff straight out of The Canterbury Tales (with a Carry On film twist).

Eating in the city veers from the rustic to the sublime. If pushed, I'd say try modern Estonian at Mekk in the Savoy Boutique Hotel for gourmet soups and clever ways with lamb.

On my return home, an old woman serving food at the airport café cracks her knuckles and eyes me contemptuously. "You have to order butter in advance," she booms in faltering English.

I get dry bread as thick as a doorstep, and rich mushroom soup garnished with dill. It's delicious.

Madam Brezhnev looks at me devouring every spoonful and grins from ear to ear. She's probably thinking: "I bet he doesn't get that in Gatvik."

Details

The flight
Estonian Air flies twice weekly from Gatwick, returns from £230 (December) and £160 (January), www.estonianair.ee.

The hotel
The Merchants House Hotel costs from ¤95 B&B for doubles, suites from ¤179. www.merchantshousehotel.com

The tour
Estonian Experience: The Soviet Legacy Tour costs from €50pp. www.estonianexperience.com