When it comes to fine wine, Santorini's no basket case

The Union flag flying over Canava Argyros was easier to spot than any of Santorini's vineyards. Vines here are trained to grow round and round in "baskets" on the ground rather than up on trellises. I'd actually driven past several fields of vines without realising it.

At Argyros, the manager, Stephanos Georgas, had raised the flag because a visitor from Britain was coming that morning. I was impressed by the gesture, but then the island is very keen to make the claim that it's now producing some of the best wines in the Mediterranean. They've even created a north-south Wine Road recently that runs the length of the island and allows you to take in all 10 wine producers by following roadside signs.

"Is Greek Volcano Island the New Napa Valley?" I'd read in the American press. Time to find out. Stefanos led me inside the small whitewashed canava (cellar) that the Argyros family had built in 1903. For generations the family had been farming grapes here in Exo Gonia, but at the beginning of the 20th century they decided to make their own wine. Despite operating on only 35 hectares of volcanic soil, Argyros has had a huge hit with its assyrtiko wines, even getting them into Marks & Spencer.

"We produce 280,000 bottles a year," said Stefanos as he poured out the first glowing vintage, and handed it to me almost reverently. He was a big man, but graceful. "I don't think we can produce much more," he admitted. "It's backbreaking work."

Because the grapes are coiled into a basket shape at ground level, harvesting on Santorini is by hand. And because the land here is "aspa" – littered with volcanic ash, lava and pumice – no machinery can be used. "Everything here is done by hand or donkey," said Stephanos.

Wine-making goes back thousands of years on Santorini but the fact it exists at all is something of a minor miracle. There is virtually no rain and so in the summer the vines have to trap moisture inside their baskets overnight to feed the grapes. The roots go down 20 metres in places to extract every nutrient from this volcanic landscape.

Hot blasts of sandy wind blown from Africa can wipe out a crop, and so most wineries are located in the south of the island sheltering behind a huge boulder of limestone and schist known as Mount Profitis Ilias. At 566 metres above sea level, Ilias is the unofficial patron saint for Santorini wine.

Stephanos watched me from the bench opposite as I took my first sip of assyrtiko. "This wine has the minerality of the landscape," he urged softly. I can be fairly suggestible when it comes to tasting notes, but I could believe those hardy little grape vines in the grey and black soil really had sucked up the very essence of Santorini. These are the kind of crisp wines I like – acid whites with hints of lemon and lime. I was seduced at my first tasting.

An hour later, a day that had started hot and bright was promising to be hotter still. As I left, a slight smell of sulphur hung in the air. "Is that the new volcano?" I asked Stephanos. Three miles to the west, in Santorini's caldera, Nea Kameni is growing every year. Stephanos pointed to the yellow sulphur on leaves peeping out of a nearby basket. "No," he explained. "This is the one nutrient we use. The rest we leave to the soil."

My next stop was Santo Wines, a co-operative venture for all the island's vine growers who do not make their own wine. It occupies a stunning position on the caldera rim 300 metres above sea level. Down below I could see cruise ships disgorging their passengers. The view of the Mediterranean from this 27km arc, originally the interior walls of a great volcano that blew up 3,500 years ago, is what made Santorini a tourist trap in the 1990s after its industries – manufacturing and quarrying – collapsed. If you are fortunate to be on the rim when the sun sets into the Aegean you'll know immediately why Santorini is special.

However that view wasn't so kind to Santorini's wine industry. All this I was to learn from Stela Kasiola, marketing manager at Santo, as we sat with our tasting glasses looking down at the port. "Industry failed on Santorini after the earthquake of 1956," said Stela. "But in the 1980s and 1990s, tourism came to our rescue and grew so rapidly that it was no longer worth young farmers keeping their farms going. They could make much more money building holiday homes."

So, the Santo Wine Co-operative took over, buying grapes off the farmers to keep them in business. "We process 65 per cent of the vines on the island and produce 840,000 bottles of wine a year."

The loss of farmland has stabilised now. In 1995 the average age of a farmer on Santorini was 65, now it's 53. This means there should be fewer half-built holiday homes and hotels spoiling the roadsides of Santorini in the future.

Santo Wines is a perfect shore-visit for cruise ship passengers. It's close to the harbour and is as big and glossy as Argyros is tiny and basic. The shop has whole walls of wine bottles and other local produce, such as sweet tomato paste. There's also Greek honey and olive oil from the mainland alongside far too many cuddly donkeys.

The average cruise ship tour spends about 45 minutes at Santo Wines from getting off the coach to getting back on, during which time people can taste at 50 cents a shot, buy bottles of co-operative wine, and snap lots of photos. But this place is vital for popularising the idea of Santorini wine as a quality product. You will find no retsina at Santo Wines, Stela assured me.

As bouzouki music played into the room on tinny speakers, we looked at more forms of assyrtiko – which was fast becoming my favourite grape. Stela demonstrated what a good wine it is for food by producing a salad of sweet tomatoes, katsouni (the local sweet cucumber), capers and a Santorini goat's cheese known as chloro.

We also sampled nykteri wine, a virile blend of assyrtiko, athiri and aidini grapes that has won seven international awards in the past three years.

Picking up the red-and-cream Wine Road signs from Santo Wines, I drove south to Megalochori, where a sign marked "Gavalas Wines" took me into the tiny centre of this beautiful whitewashed village.

My hire car had to breathe in to squeeze down the tiny roads that emptied on to the main square where a large floral cross had been erected for the Orthdodox Easter. Soon a lifesize figure of Judas would be tied to that cross and set on fire, a big event in Megalochori.

The entrance to Gavalas turned out to be up a small subterranean passageway through which grapes used to be brought into the cellar. In the small whitewashed room where they would be crushed under foot and strained through a wicker basket, I met Dmitra Gavala, daughter of the current owner.

She showed me a childhood picture of her with her father, Giorgio, stamping on the grapes. I asked her if wine is still made this way and was surprised to learn that vinsanto actually is – although the company's other wines, katsano and xenoloo are now processed using modern machinery.

Vinsanto is the sweet wine of Santorini made from grapes that are picked and left out in the sun so that the sugar condenses. Currently 70 per cent of Gavalas's output goes to the United States so, I asked, when we might get some shipped over to Britain. "We need to produce more wine!" Dmitra explained. She hopes that one day she may take over the winery.

There is an enthusiasm, energy and intensity about these wine producers that belies the popular image of Greece as an ailing economy. In my mind, anyone who can coach such impressive wines out of such a hostile environment can accomplish anything.

Santorini is a gorgeous island to witness as a holidaymaker, but wine tourism is now giving us another good reason for visiting.

That said, when I got back to my hotel at the end of a day spent avoiding potholes and quad bikes and wondering why streets have no names on Santorini, I was particularly pleased to take a bottle of assyrtiko on to my terrace and open it as the sunset show began.

What could be better? The two best things about this magical Aegean island enjoyed through the prism of a wine glass.

Travel essentials

Getting there

Adrian Mourby travelled with easyJet (0843 104 5000; easyJet.com), which flies to Santorini from Gatwick and Manchester four times a week.

Getting around

Rhino (0845 508 9845; rhinocarhire.com) offers car hire on Santorini from £15 per day.

Staying there

Ikies Traditional Houses in Oia (00 30 22 8607 1311; ikies.com) offers doubles from €225 (£196) including breakfast.

Tasting there

Wine In Santorini (00 30 22 8607 1861; wineinsantorini.com) offers wine tours around the island from €70pp (£61).

More information

visitgreece.gr