Peru’s capital, Lima, is a vibrant city whose grandeur may be faded but still lives on. Once the heart of Spain’s South American empire (christened by its founders as the ‘City of Kings’) modern Lima is a huge metropolis crammed with culture and a history that goes back to the Incas and beyond.

Situated halfway down Peru’s desert coastline, Lima looks out on the Pacific Ocean, with the foothills of the Andes at its back. The main square of its historic centre, with its Spanish colonial mansions graced by latticed wooden balconies, is a UNESCO World Heritage Site.

Despite lacking the glamour of Rio or Buenos Aires, Lima has much to offer the sightseer (beautiful churches, museums, pretty seaside suburbs and a few remaining Inca ruins), but is also a gateway to the marvels of Machu Picchu, Lake Titicaca and the Amazon jungle.

However, the primary sense of Lima that visitors get from walking around the city is that much of the population is merely surviving, scraping by in a variety of ingenious ways. Even in the richest districts, signs of poverty are never far away.

In the main business district, it is not uncommon to see bailiffs strip a failed business of its belongings, piling unwanted items into a sorry heap on the pavement, while businesspeople, caught in traffic, are entertained by jugglers and fire-eaters or accosted by dozens of street-sellers offering paper napkins, plastic coat hangers and even the odd fake gold Rolex.

The hardship of life in Lima may account for the Limeños’ philosophical outlook and their black sense of humour. In a city where political and financial turmoil is the norm, it does not do to take things too seriously. A popular belief in miracles and religious mysteries must also help.

Lima is a capital that has outgrown its boundaries. A town originally designed for tens of thousands now accommodates nearly eight million – one third of the country lives here. As Peru’s economic powerhouse, Lima attracts over 1,000 newcomers from the provinces every week, drawn by the dream of finding work and relative security.

Shantytowns continue to grow outside the city and the upper classes have abandoned the city centre for the seaside suburbs of Miraflores or San Isidro. With their skyscrapers and international banks, these are now the main business centres, while the nearby Barranco is a hub of Lima nightlife.

Lima’s glory days as the centre of Spain’s South American empire may be over but the city remains a magnet for regional leaders and political summits. President George W Bush and Britain’s Prince Andrew are the latest in a list of recent illustrious visitors to the Peruvian capital.

However, modern Lima is a long way from the city founded by Francisco Pizarro, the Conquistador who seized the ‘Land of the Incas’ for Spain, in 1535. Building near the site of ancient settlements (two pre-Inca temples or huaca are still standing in San Isidro and Miraflores) proved perfect for a colonial capital, with its large and fertile river valley, a natural harbour nearby and fairly easy access to the Andes.

As the centre of a Spanish viceroyalty that spanned Peru, Ecuador, Bolivia and Chile, Lima was the most important South American capital, up until the 19th century. Much Andean silver passed through Lima on its way to Spain and the wealth generated paid for the colonial mansions, the geometric street layout and Baroque churches whose altars still glisten with silver.

The climate from May until November can be dismal, as a grey sea mist or garua (popularly known as the ‘belly of the donkey’) dominates the skies. The summer months, the best time to visit, are blessed with a hazy heat. Limeños head to the beach for the weekend, to enjoy sun, sea and ceviche – raw fish marinated in lime juice, washed down with a famous pisco sour, a potent cocktail of brandy-like pisco, lime juice, syrup and egg whites.