Sorry, but the Cold War's off: Tony Barber goes to dinner at Gundel's - Eastern Europe's most famous eatery

WHAT a gloomy crew the Hungarians are at times. Take, for example, Hajnal Barabas, a Budapest clairvoyant. Among her predictions for 1993 are two natural disasters (including a spring flood), rising crime, more national conflicts and a religious war.

She obviously hasn't dined often enough at Gundel's, for there is nothing depressing about this most historic of Budapest restaurants, which was recently restored to all its stately pre- communist magnificence by two Americans at a cost of pounds 10m.

Touring its six dazzling private banquet rooms and its immaculately designed gardens, admiring the Hungarian masters' works that hang in the main dining-room, one could be forgiven for imagining that a white-whiskered chap consuming spoonfuls of Beluga caviar near the tuxedoed string quartet is none other than the Emperor Franz Josef, back at his rightful table.

As it happens, Gundel's serves a rich, creamy, potato, sausage and artichoke soup that is named in honour of Austria-Hungary's penultimate ruler. Whether or not the soup was favoured by Charlie Chaplin, the German novelist Thomas Mann or anybody else in Central Europe who was rich and famous and dined here between the world wars, is not known. But these days the dishes are, if anything, even more startlingly mouth-watering.

Hungary is renowned for its weird and wonderful cuisine, but Gundel's beats the lot. Vineyard snails baked with fresh horseradish, or butter-fried frogs' legs with a parslied crust, pave the way to an 18th-century recipe for sauerkraut baked with catfish, and fish sausage, or garlic- braised scallop of wild boar with potato roulade. One culinary extravaganza on the menu consists of five courses, each based on 'the incomparable Hungarian goose liver'.

Desserts include strudel cup filled with strudel ice-cream, roasted walnuts and whipped cream, after which you may sample a glass of vintage Tokaj wine or a cherry brandy from Kecskemet. At perhaps pounds 35 a head, a meal at Gundel's may be too steep for most Hungarians, but clearly not all: last Friday night more than half the 160 seats in the main room were taken.

The restaurant was opened in 1904 by Karoly Gundel, who started his career serving bread and water in his father's more modest establishment. By the 1930s Gundel's was a legend across Europe, but in 1949 Stalin's Hungarian henchmen nationalised it. The cushioned furniture wore out, the walls became grimy, and by the 1970s the place had that peculiarly oppressive People's Democracy atmosphere, as uninviting as a dish I once saw listed in English in a Warsaw restaurant: 'Old Polish Yuk Saddlebag.'

Then, in 1990, along came Ronald Lauder, the heir to the American cosmetics empire, and George Lang, a Hungarian-born violinist who turned up in New York in 1946 and worked in restaurant kitchens before becoming the owner of the tres chic Cafe des Artistes in Manhattan. They bought Gundel's from the Hungarian government for pounds 5.3m and rebuilt it for another pounds 4.7m. Mr Lang says he met Mr Lauder in a New York restaurant one day and used a napkin to sketch his vision of a reborn Gundel's.

One of his brainwaves was to buy a 58-acre vineyard in the Tokaj region to fill the wine cellar. Another was to train all 150 staff in English, German and how not to be a communist waiter.

Gundel's location is as dramatic as its food. It stands at Heroes' Square, a vast space with statues of Hungarian patriots and a winged figure atop a 118ft column. You reach it from Budapest's most elegant boulevard, modelled on the Champs-Elysees; once called Stalin Avenue, then People's Republic Avenue, it has now reverted to Andrassy Avenue, after the 19th-century statesman, Count Gyula Andrassy.

Historic it may be, but Gundel's has a modern way of promoting itself. The menu states: 'The rise of the House of Gundel is inseparable from the comet- like rise of Budapest and Hungarian culture at the start of the 20th century. The reopening of Gundel's, indomitably a blessing, is a national and artistic event beyond its culinary significance.'