Uncharted waters

It was early evening when we first visited Lake Orta. The hills surrounding the water were veiled in soft mist; the pine trees on the higher slopes rearing skywards like shadowy spearheads. The lake was mysterious and pale, with a tiny island floating as grey as a ghost-ship in the centre. And then - drifting magically across from the island towards the jetty - came strains of piano and the muffled peal of church bells.

It was early evening when we first visited Lake Orta. The hills surrounding the water were veiled in soft mist; the pine trees on the higher slopes rearing skywards like shadowy spearheads. The lake was mysterious and pale, with a tiny island floating as grey as a ghost-ship in the centre. And then - drifting magically across from the island towards the jetty - came strains of piano and the muffled peal of church bells.

Lake Orta, one of the smallest and least-known of northern Italy's sub-Alpine lakes, is a place for sublime moments. The German philosopher Friedrich Nietzsche, who visited the lake in May 1882 and believed that the experience changed his life forever, inscribed the date "von Orta an" ("from Orta onwards") as a preface to his masterpiece Thus Spake Zarathustra. Other 19th-century writers enchanted by its quiet beauty include the French novelist Honoré de Balzac, who wrote rapturously of this "grey pearl in a green jewel-box", and Robert Browning. His poem "By the Fireside", which contemplates the beauty of a setting where "Alp meets heaven in snow", describes the lakeside village of Pella as a luminous "speck of white... in the evening-glow".

Strangely, despite such praise, Orta seems nowadays to have become rather a secret place - so secluded that many Italians have never heard of it. But to those who know its fairy-tale setting, the lake is Cenerentola (Cinderella): the beautiful, self-effacing maiden ordered to stay at home while her flashy elder sisters go to the ball. As visitors flock eastwards to the comparative fleshpots of the nearby, much larger Lake Maggiore, pretty Orta offers altogether quieter, more mystical pleasures.

Isola San Giulio (St Julius's island), home to the haunting music that greeted our arrival at the lake, encapsulates that mysticism in miniature. It houses an ancient basilica and a 19th-century seminary. The island is oval in shape, with the bell-tower of the basilica standing aloft at the sharper end of the landmass. Especially when floodlit in the evening, it looks for all the world like a mast or a look-out tower on some magical holy ship.

The origins of Isola San Giulio and its basilica are wreathed in tales of magic. Legend says that for centuries it was the home of dragons - including the evil wyvern, a winged, two-legged beast with a terrifying barbed tail. When St Julius, the island's namesake and founder of its basilica, arrived at Lake Orta over 1,600 years ago, no boatman was willing to take him across. Instead, with saintly ingenuity, he spread his cloak over the water in front of him like a raft and sailed to the island using his staff as a rudder - while simultaneously dispatching dragons with his sword.

Luckily, the crossing to the island is a lot less hazardous today - only a five-minute ride from the jetty of Orta San Giulio, the main town of Lake Orta. But the special atmosphere of the island that moved the saint to choose it as a sacred place is still apparent. The basilica is awe-inspiring, with a magnificent 12th-century pulpit carved out of serpentine mined from a quarry at the nearby village of Oira. And the flagged alleyway that runs around the island's interior, flitting in and out of the sunlight, is signed "the way of silence" in one direction and "the way of meditation" in the other. As you walk, you encounter small signs in several languages that remind you that you are in a place for reflection. "If you can be yourself, you are everything," says one. "Listen to the water, the wind, your steps," urges another.

The waterfront of Isola San Giulio, ringed by beautiful old palazzi draped in wisteria and trumpet vines, also has an ethereal quality. The palazzi are private, but their owners host a variety of cultural events open to the public. The Villa Talonne, the home of the daughter of a piano-maker, has a concert hall where recitals are held. There is an annual Festival of Ancient Music. And Gabriel Griffin, a Welsh expatriate, organises an international poetry festival each autumn.

Back on the jetty of Orta San Giulio, the enchantment continues. With an area of only seven square miles and a perimeter of 21 miles, Lake Orta has only one main town. But, like the lake, it is a jewel. Traffic-free in the centre, with romantic stone archways and balconies, street lanterns and leafy courtyards tucked behind iron gates, it epitomises Italian charm. Piazza Motta, a broad, flagged square, runs parallel to the waterfront and is partially screened from the bustle of the jetty by a splendid row of chestnut trees. The other three sides of the square are bordered by shabbily elegant pastel-washed buildings - mostly 16th- and 17th-century in origin, but now housing small shops, gelateria and tobacconists. Cheerful cafés sprawl across the piazza, and winding alleyways lead the way into warrens of narrow streets, all cluttered with the familiar Italian mix of peeling shutters and colonnades, fading frescoes and fluttering washing-lines.

The summer is the town's busiest time for visitors. If you visit in June or July, you'll find the lake partly given over to water sports. But, even at the height of the season, the accent is on normal life. A market has been held in the piazza every Wednesday since 1228, and the town's shops are, in the main, happily free of tourist tat. There are speciality stores, including an antiquarian bookshop and one selling period jewellery, plus numerous art and ceramics galleries and an excellent delicatessen. Here you can find local Nebbiolo wine and sausages of all kinds, including an unusual mortadella made of liver. You may want to think twice before sampling the full-on delicacy of tapulon. Originating 10 miles away in Borgomanero, it offers a blend of wine, garlic, salt, oil - and chopped donkey meat.

A stay in Orta San Giulio allows for all the familiar Italian pleasures, including searching out little family restaurants tucked away in hidden nooks and crannies, like the cosy Pizzeria Campana or the creperie Edera. But the town is, above all, a treasure-trove for lovers of old buildings. At the northern end of the square, the town hall - an astonishing construction from 1582 built on stilts and awash with brightly-restored frescoes, coats of arms and trompe l'oeils - dominates the market-place like a rectangular circus tent. Rising steeply to the east of the square, a cobbled ascent - Salita della Motta - leads to the pretty lemon-coloured parish church of chiesa dell'Assunta, founded in the 15th century.

Orta San Giulio's pièce de résistance demands a further climb. At 1,200ft above sea level and 325ft above the lake, the Sacro Monte di San Francesco is simply extraordinary - a hilltop plateau laid out with 20 chapels dedicated to the life of St Francis of Assisi.

All the chapels are unique in design; the range of architectural styles reflecting the fact that building took place over a 200-year period. The earliest, as you might expect, are the simplest. The late 17th-century additions - crammed with painted statues arranged in theatrical tableaux - are staggeringly beautiful or utterly hideous, depending on where you stand in relation to Madame Tussauds. But, whatever your view, the experience is unmissable.

Sacro Monte was designated a National Park in 1980. The chapels are built like a village, amid winding lanes and woods. Walkways are tucked away behind ancient hedges or meander through scatterings of wild flowers. It's nature at its loveliest and feels a world away from anywhere. Bees buzz, birds sing - but the rest is silence. And below you, green and tranquil, Lake Orta lies dreamily on her mountain bed - the sleeping princess of the fairy tale.

TRAVELLER'S GUIDE

GETTING THERE

British Airways (0870 850 9850; www.ba.com) flies to Malpensa near Milan, the best starting point if you are picking up a hire car. Alternatively, nearby Linate is served by BA, Alitalia (0870 544 8259; www.alitalia.co.uk) and easyJet (0871 750 0100, www.easyjet.com).

STAYING THERE

The Piccolo Hotel Olina (00 39 0322 905656; www.orta.net/olina) on Orta San Giulio has doubles from €60 (£43), with breakfast.

EATING THERE

Creperie Edera (00 39 0322 905534), via Bersani 15, Orta San Giulio.

FURTHER INFORMATION

Lake Orta (00 39 0322 905 614; www.orta.net). Italian State Tourist Office (020-7408 1254; www.enit.it).