After half an hour’s drive, a huge grey slab emerges from the lava strewn lunar landscape - the aluminium smelting factory. Electricity is so cheap in Iceland that it makes economic sense to import the bauxite from Australia, smelt it down in these cut-price furnaces and ship it out again.It’s a bizarre business and an unlikely indicator of Iceland’s unique situation.

Iceland is a place of epic, elemental power. Nowhere in the world do the forces of nature put on such a show of strength. The sweeping outlines of volcanoes burst through the horizon, churning rivers course through valleys scarred by the brutal force of long-gone glaciers. “But the ice age hasn’t finished in Iceland,” says Jon Hannesson ominously.

He runs a hostel in a converted farm in Hjardarbol, near the small town of Selfoss, an hour’s drive east of Rekyavik. The hostel, which sleeps up to 40 people in a mixture of smart outbuildings and converted stables, is comfortable, welcoming and (thank goodness) warm.

Jon Hannesson introduces groups of pupils and teachers from St Albans Girls School and Watford Grammar School to the wonders of his country with an informal evening talk illustrated by slides of its best-known sights. Like all Icelanders, he’s a keen amateur geologist who knows his plate tectonics from his periglacia l deposits. The earthquakes are nothing to worry about, he assures us nonchalant ly, just on the Richter scale once or twice a month, “like a truck driving past your house.” Likewise, the huge eruption beneath the Vatnajkull glacier days previously was a regular occurrence. Once every 80 years or so it blows its top, sending floods of biblical proportions down to the sea.

School groups staying at the hostel can plan an itinerary to suit their requirements, with transport and expert guides included.

For the conscientious, there are worksheets and detailed study materials on everything from explosion craters to the country’s main environmental problem, soil erosion.

With so much to see, where do you start? The next day we set offin an all-terrain coach to one of Iceland’s favourite beauty spots. The mouth of the Porsmork valley, a mile wide, featureless plain populated only by geese, gives no indication of the wonders within. The rough track crosses idly meandering rivers as it heads towards Myrdalsjkull, a huge ice mass lolling over the mountains. To stand beside its creaking, dirty, white bulk is a humbling experience.

Further up the valley, the land is greener, with occasional small summer houses and patches of miniature birch, some of the few trees to be seen anywhere on Iceland. The paths leading up through the black volcanic scree are steep but the trek to the top of the surrounding slopes is worth the effort.

From the tops, the view is breathtaking. To one side, you can see 20 miles to the coast, to another lies Hekla, Iceland’s most famous volcano, a serial eruptor capped in snow. All around are swooping valleys and colossal mountains.

It’s an impressive introduction to the country. Iceland may be the dream destination for a geography field trip (“It’s like a textbook come to life,” according to one pupil) but it is interesting for more than its extreme environment alone. Iceland’s history is rich and unusual, covering periods of great famine and emigration, foreign rule and isolation. Its economics are extraordinary - 80 per cent of its GNP comes from fishing. Its political heritage is unique.

Parliament Plains is a sacred site to Icelanders, the founding place of the oldest unbroken democratic government in the world. The plains, bordered by sheer cliffs, were formed as the North American and European continental plates shifted slowly apart, and there are few more graphic demonstrations of the mighty forces at work below the earth’s surface.

Iceland is a country of contrasts, of hot and cold and ancient and modern.Icelanders have embraced the 20th century with the same enthusiasm they retain for the many age-old myths and sagas of elves and trolls. There are more Internet users per head here than anywhere else in the world and outsize four-wheel drive jeeps roll on jumbo tyres down Rekyavik’s roads.

The capital is a curious but fairly unremarkable place, a mixture of 100-year-old cottages made from weather-beaten sheets of corrugated iron and new blocks of flats. Its one main shopping street is lined with cafs and gift shops, neither of which are cheap.

On a hill overlooking the city is The Pearl, a glass and steel atrium sitting on six huge tanks which hold the city’s hot water. It’s a stunning piece of architecture and makes a perfect vantage point for viewing the slow and sumptuous sunset over the bay.

However, to see what Iceland’s all about you have to abandon the cosy confines of the city and head back to the wilderness. At Gullfoss, one of many awesome waterfalls, the river hurtles over twin precipices into a deep ravine. But the showpiece of Iceland’s geological treasures is at nearby Geysir.

Nowadays, Geysir only performs for royalty. It hasn’t spouted naturally for some 50 years. But it made a temporary comeback from retirement during a visit by the Queen several years ago when it was discovered that dumping copious mounts of soap into its pool would rouse the beast.

Common people can still witness Geysir’s sidekick, Strokkur, a few yards away, as it bubbles and bubbles before shooting a 40-foot column of scalding spray into the air. The natural hot pools which stud the barren ground are more than a tourist attraction. In the south-west of the island,home to more than half Iceland’s 250,000 population, the lowlands are punctured by columns of steam.

Farmers use it to warm greenhouses where they grow fruit and vegetables. At the hi-tech Nesjavellir power station, engineers have drilled deep into the hot rock to extract water at 400* centigrade, cool it down and pipe it 35 kilometres to the capital. Rekyavik, meaning “Smoky Bay”, even owes its name to the extraordinary, vapoury vista which greeted its 19th-

century settlers.

But perhaps the finest way in which Icelanders harness their natural resources is by sitting in them. Al fresco bathing in all weathers is a natural pastime, made possible by the numerous naturally warm cauldrons that dot the countryside. The best known of all is the Blue Lagoon, a series of luxuriant aquamarine shallows beside the shining cylinders of a geothermal power station with reputedly therapeutic powers.

The traditional Icelandic hot pot (no relation to the Lancashire variety) is a communal outdoor plunge pool. They are the social centre and gossip exchange of every village. One of Iceland’s former prime ministers combined high-level policy talks with his daily dip. After a hard day’s hike there is nothing to beat running freezing from the changing rooms and plunging into 42 degrees C

of bone-thawing, ache-soothing, bathing bliss.

Harvey McGavin travelled as a guest of Arctic Experience (29 Nork Way, Banstead, Surrey, SM7 1PB, tel: 01737 218800) who organise study trips to Iceland