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Before Elvis hit the spiral that led to the Las Vegas gigs and the rhinestone suits, he made a film called Fun in Acapulco. Inevitably, he launched himself off the famous cliffs at La Quebrada, to win the love of the local beauty. Until the seventies, when the package tours arrived in earnest, this Mexican resort was a glamourous retreat for many of Hollywood's stars, attracting John Wayne, Cary Grant and Johnny Weismuller, the original Tarzan. Acapulco was the zenith of jet-set playgrounds, where the glitterati learned to water-ski and danced the night away in nightclubs billed as "the best in the world." Frank Sinatra sang about it, Orson Welles wooed Rita Hayworth and John Houston shot The African Queen with Humphrey Bogart and Lauren Bacall. John and Jackie Kennedy spent their honeymoon there, as did the Clintons.

Acapulco takes its name from a Nahoa Indian myth about two young lovers, Acatl and Quiahuitl, who were barred from marriage by their parents. The warrior Acatl was so distraught that his tears melted his body, leaving a muddy pool which sprouted reeds. Quiahuitl became a cloud and wandered the sky until she located the pool, then fell like a waterfall over the reeds and united them forever. It is hard to associate this ancient legend and the glamour of post-war Hollywood with the modern town - a sprawling bay of high-rise concrete hotels and cascading condos, a sort of Vegas-by-the-sea, preparing for an Elvis come-back. In fact, it is hard to imagine that Acapulco was ever anything other than what it is now.

I stayed at the Fiesta Americana, a vast white palace of bars, boutiques and restaurants, with a bright turquoise pool full of Mexican families doing some form of aquatic aerobics to thumping in-house music. My balcony over-looked the wide band of golden beach and the breezy blue Pacific, where jet-skis jostled with speedboats and every few minutes some terrified punter came sailing past the window strapped into a parascending harness. The main strip is lined with seafood restaurants and endless bars, serving "happy hours" that seem to last the whole day, and numerous all-night clubs, offering everything from transvestite shows and strip joints to the Pacific mix of Ibiza's dance music. Palladium and Enigma boast spectacular dancefloors, with breath-taking views from Diamante, the swish southern end of the bay and home to the modern Mexican jet-set. Alongside Planet Hollywood and the Hard Rock Cafe, there is the equally depressing sight of four frisky dolphins chasing each other round a pool smaller than a tennis court. For sixty dollars a throw, you can cavort with Fungie's relations and leave with a photo of them "kissing" you. The truly masochistic may be tempted by a "booze cruise" around the bay. A few dollars guarantees all the tequila that you never wanted, elderly couples salsa their way across the deck and the swell sends the boat goes lurching from side to side like some funfair ride-from-hell. Every few minutes, the deafening music is interrupted by a commentary on local houses of the rich and famous. The cliff-side mansion belonging to Julio Iglesias is bizarrely over-shadowed by a glass-fronted palace owned by the Chairman of the Mexican Olympic Committee.

However, the cliff-diving at La Quebrada is something not to be missed, especially when viewed in the evening from the tiered balconies of La Perla, a restaurant that overlooks the pool of foaming waves which pummel the cliffs below. The tradition is passed down through families, the younger boys starting from twenty or thirty metres while their fathers perform double back-dives from twice the height, twirling flaming torches through the air as they launch themselves into twelve feet of water. Accurately judging the ebb and flow of the surging tide is absolutely crucial to surviving. Raul Garcia Bravo, the most famous veteran of the local Club de Clavadistas - Club of High Divers - claims to have made a staggering 37,000 dives.

Just beyond La Quebrada, tucked into the northern end of the bay and the old part of town, the fading past of the Hollywood years still lives on, in a small family-run hotel. Painted in the rich vermilion pink of a blackcurrant sorbet, perched about five hundred feet up a cliff, Los Flamingos is a legend in itself. First opened in the thirties, the hotel was abandoned ten years later, then bought by John Wayne in 1954 and used as a "secret hideaway" for his notorious Hollywood Gang - Red Skelton, Richard Widmark, Errol Flynn and others, all of whom appear in the hall of fame photographs that fill reception. Wayne so loved the panoramic views of the Pacific that he built the Casa Redonda, the Round House, which now sleeps six and was Johnny Weismuller's home for the last years of his life. People claim that you can see broken tequila bottles and shot glasses scattered on the rocks below, discarded during The Duke's late night drinking sessions.

Los Flamingos is still run by Adolfo Santiago Gonzalez. He first met Wayne while working as a towel-boy on Caleta Beach, then rose through the ranks to become general manager of the hotel before buying the property in the 60's. One of the old sepia photographs shows Adolfo as a wide-eyed sixteen year-old boy, dwarfed by the hulking frame of the Hollywood giant. The hotel resumed its commercial status in 1960 but maintained the informal, personal atmosphere that must have attracted the stars. The forty six rooms are simply decorated with tiled floors, stucco walls, louvred windows and the odd painting by a local artist. The various suites offer private balconies with hammocks poised above limitless views of the Pacific, the perfect spot to watch for migrating whales which pass this way in the winter months.

The hotel bar is home to the Coco-Loco, a deceptively innocuous cocktail served in a coconut, laced with tequila, gin and white rum. Adolfo insisted that I try one and, as we talked, my legs started to vapourise beneath the table. Rather than risk the embarrassment of trying to stand up, I accepted his invitation to stay for lunch. It was Thursday, the day for pozole, a traditional form of Mexican cuisine which varies from state to state. A local band, led by a grinning bear of a man with an bright pink double bass, started to flood the hotel with classic mariachi. The breeze blew in from the Pacific, through the palm trees and banana plants, and the restaurant started to fill - with locals rather than tourists. It was easy to imagine The Duke and his friends settling down for a long lunch at an adjoining table. It all felt very fifties, very Hollywood, in a relaxed and unpretentious way. I asked Adolfo if he still had regular guests from abroad.

"Oh yes," he nodded. "We have friends in California, Canada, New York...Many have been coming for twenty years and always book the same room."

The loyalty of the regular guests has insured that Los Flamingos will always be full. Judging by the effects of the Coco-Loco, I did not doubt him. Just as the last detectable nerve current disappeared from my legs, the food arrived, promising some vague hope of finding my feet again. Small tortillas filled with baby shark meat were followed by the pozole itself, a thick broth of broiled pork and corn, to which we ceremoniously added an array of condiments - slices of avocado, finely chopped onion, crisp wedges of fried tortilla, dried oregano, a pinch of cayenne, some ferociously hot green chillies and chicharrones, a vastly superior form of pork scratchings. The result was quite delicious, but even more disabling than the Coco-Loco. Siesta suddenly seemed like the most civilized of Spanish inventions. Adolfo directed me towards a hammock, where I spent the rest of the afternoon pretending to look for whales.

In contrast to the intimacy of Los Flamingos, the main strip in modern Acapulco feels like a mixture between a glorified Costa del Sol, a seaside Las Vegas and a Pacific Ibiza. If you are looking for high energy night-life, a fine golden beach and a touch of tacky nineties glamour, then you can't go far wrong - it's all there. Bars and clubs keep pumping through the night, the tequila is cheap and Mexicans sure love to party. Since Cancun now draws the majority of European package tours, the original jet-setters resort has become more of a playground for young Mexican tourists, mingling with middle-aged couples from California trying to re-kindle their youth. The government is certainly trying to encourage new developments, like the Princes Hotel complex near the northern beach of Puerto Marchesa, but the few non-Mexican tourists that I spoke to seemed to prefer Cancun - better beaches, less crowded, more fun. At the same time, like Ibiza, Marbella and St. Tropez, Acapulco is still offering the ingredients that attracted the jet-set fifty years ago - sun, sand, sea and sexy night-life. The real difference now being the sheer numbers of people that can afford that sort of holiday. And remember, if you just want to dip in and out of the glitz, maintain some privacy and lie in a hammock with a good book and a great view, then Los Flamingos provides an idyllic escape. By the time the Coco-Loco kicks in, you won't be moving far.

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