Perched on the Bosphorus Strait where Asia meets Europe, the breathtakingly vibrant urban identity of Istanbul is rooted in a clash between the problems of a developing country and European aspirations. The stunning beauty of the Blue Mosque, the Topkapi Palace and all the other Ottoman and Byzantine treasures, collides giddily with unplanned development, rising public health problems, overcrowding and pitiful poverty.

The demographics are startling enough, the hard facts which underpin the frenetic experience of life down on the street in Tepebasi, near the Galata Bridge or round the Grand Bazaar. Scavengers, street sellers, artisans, tenement dwellers, the dispossessed, a diversity of ethnic groups from Armenians to Kurds, together with tens of thousand of tourists, constitute what writer Philip Mansel has described as the “magic microcosm of the Bosphorus”. Istanbul has grown from a population of 5.5 million in 1986 to well over 12 million today. With about half a million pouring in each year, mainly peasants from the Anatolian countryside, the population is estimated to rise to 20 million by 2020, this in a country in which the infant mortality rate stands at a startling 52.6 per thousand per annum, compared with Germany’s 5.8.

The conflicts and inequalities of a dense and variegated social class system are played out in the harsh dealings of an unrelenting market economy. At the bottom are those who scavenge by recycling tin cans or collecting scraps of material from the bazaars to sell for cushion stuffing. Others eke out an existence as street sellers, pushing everything from cigarettes, tissues, food of dubious origins, boat trips on the Bosphorus, shoe shining or the sad and simple offer to weigh you on a pair of bathroom scales.

Most desperate are those reduced to begging by uncovering their deformities or gruesome injuries. An estimated four million of Istanbul’s inhabitants live in dire poverty while at the top end of the social hierarchy there are those prosperous enough to own the splendid summer houses with pools and viewing pavilions along the Bosphorus shore.

Fresh water is another problem. Tanker transport is increasingly necessary for some areas. The growth of shanty towns, in which migrants live in shelters made of tin, polythene or stolen building materials, with little or no sanitation or refuse disposal, has led to the pollution of at least one of the city’s reservoirs, near which 60,000 have had to set up home.

Tourism has also taken its toll and the Turkish government’s failure to impose clear national conservation policies is evident, not only in Istanbul but across the country. The foundations of the last home of the Ottoman Sultans, the beautiful Dolmabahce Palace, are threatened by the sheer weight of a monstrous hotel built on the slope above. Luxury flats, hotels and office blocks have taken up almost every green space in the attempt to steal a view of the Bosphorus. More than 12 of the lovely wooden yali, waterside summer palaces dating from the Ottoman period, have been destroyed by the wash from giant oil tankers. At least the “sweet waters” of the Golden Horn, the river flowing into the Bosphorus, is undergoing a clean-up programme. World Bank finance will create a new arterial sewer to remove the fetid water.

Istanbul brings sharply into focus the catalogue of Turkish problems which have made the EU reluctant to bring it aboard, yet the city still has an incredible vibrancy. It is an important focus for trade between the Black Sea and the Mediterranean. Some 26,000 ships a year pass through the centre of the city. The world’s biggest cruise ships pause to drop off tourists.

The vitality and diversity is best captured on a trip from the ferry terminal at Inonu near the Galata Bridge on one of the ancient Newcastle built boats on which thousands of commuters get to work from dormitory settlements such as Uskadar or Kadakoy on the Asian side. The ferries jostle for position with fishing boats, cruise liners, freighters, car ferries, tankers, boats taking trips round the Bosphorus. It is one of the world’s most stunning short journeys by water, yet Istanbul remains the destination to which British tourists are least likely to return. For the geographer, the sociologist or anyone with a serious interest in urban issues, however, it is an irresistible place.

‘The Turkish Labyrinth’ by James Pettifer (Penguin), is recommended reading on contemporary Istanbul. Philip Mansel’s ‘Constantinople: City of the World’s Desire’(Penguin), is good on the historical development of the city