You can still have a high time on the old hippy trail

What seems like a lifetime ago, I packed up my rucksack and headed off down the "Hippie Trail" through Iran and Afghanistan, and ultimately to India. But for most of my long-haired, wide-eyed travelling companions, the ultimate destination was Kathmandu - an almost legendary city of temples nestling high in the Himalayas. True, it shared with Goa the honour of being the coolest place to hang out; but it was rumoured that Kathmandu was special, a place where time had stood still.

What seems like a lifetime ago, I packed up my rucksack and headed off down the "Hippie Trail" through Iran and Afghanistan, and ultimately to India. But for most of my long-haired, wide-eyed travelling companions, the ultimate destination was Kathmandu - an almost legendary city of temples nestling high in the Himalayas. True, it shared with Goa the honour of being the coolest place to hang out; but it was rumoured that Kathmandu was special, a place where time had stood still.

Part of the mystique was due to Kathmandu's still being fairly inaccessible. Most of the new arrivals were road-weary overlanders, and the final journey up from Varanasi on overcrowded trains and buses was enough to make them want to hunker down for a while. And if it all seemed exotic and otherworldly, that was because the Kingdom of Nepal had been completely closed to foreigners until 20 years earlier, and its capital retained a village-like charm, with paddy-fields coming right up to the walls of temples and old Rana palaces. There were few roads, only about 300 cars, and the air was so clear that whenever the clouds lifted you could see the Himalayan snow peaks.

Another advantage was that there were virtually no "straight" tourists. Organised trekking was still in its infancy. While some of the overlanders did climb up into the hills, usually they just moved into one of the budget hotels around Jhocchen and got spaced out on the cheap - and then still perfectly legal - dope. Most of them were so blasted on Temple Balls that they couldn't get their tongues around the word Swayambhunath, so this ancient Buddhist shrine became known in freak-speak as The Monkey Temple. In next to no time, Kathmandu became the Haight-Ashbury of the East, and the area where most hippies congregated was renamed Freak Street.

A quarter of a century later I returned to Kathmandu, this time by air. That things had changed was already apparent as the pilot began his descent. At 30,000 feet we had been treated to a breathtaking panorama of the Himalayas; but the Kathmandu Valley itself was obscured by smog - the end result of thousands of trucks, cars and auto-rickshaws belching out exhaust fumes which are then trapped by the surrounding mountains. These days, you can only see the snows from Kathmandu when a stiff wind is blowing. More out of curiosity than in the hope of finding a half-decent hotel, I told a taxi-driver to take me to Freak Street. "No good hotels in Jhocchen," he protested. "Now everyone is staying in Thamel."

He was right. Only a handful of survivors remained - the Pagoda, the Century Lodge - and they looked none too busy. What was left of Freak Street's "golden days" were a few café-restaurants and convenience shops with names such as The Snowman or Mr Cool's Munchies and Drinks Store. Obviously this had become a place to visit, not to stay at.

Most of the day visitors were ex-hippies on a nostalgia trip. They were now greying, 40-something "creative professionals" travelling expensively and on a tight schedule. While in Kathmandu they had reverted to semi-ethnic dress and the whiff of patchouli hung heavy on the air. That Freak Street has become a living museum was evident from a banner stretched across the road. "Welcome to Hippies' Once-Haven", it declared, on behalf of the Durbar Square Tourism Promotion Committee. It was like the signs directing tourists to Carnaby Street for a taste of the Swinging Sixties. If there were any "freaks" left on Freak Street these days, they would be gaped at like exhibits in a circus. I decided to stay in another part of town.

"So when did all these changes happen?," I asked KC, a survivor of Freak Street days who is credited with opening the first "travellers' restaurant" in Kathmandu. "Oh, maybe it began in the late 1970s, after the drugs were made illegal. Then more people started flying in, not coming overland on the buses or by motorbike. They wanted different things like trekking equipment and continental food. And they had more money to spend."

It turned out that KC had anticipated these changes just a little too early. His first restaurant on Freak Street offered steak and spaghetti in much cleaner surroundings than the dingy joints serving nothing but veg-fried rice and black tea. But the hippies stuck to their old haunts. Nor was his next venture, a fast-food place called Helena's, any more successful. "People didn't want fast food because they had time on their hands. They wanted a place they could hang out in." But Helena's was in the right place, the very heart of Thamel, albeit too soon. I can remember when there were gardens and paddy fields in Thamel; these days it is backpacker city, its narrow lanes crammed to bursting with new budget hotels, souvenir and trekking shops, cafés, pubs and restaurants offering every kind of cuisine from Austrian to Japanese to Thai.

It took me some time to adjust to the new Kathmandu with its internet cafés and smart new hotels going up everywhere. The streets are crammed with honking traffic, and the city has spread its tentacles right across the Kathmandu Valley. But there are still hidden temples and "power places" out there among the paddy. All the historic Durbar squares have been cleaned up. Crumbling palaces have been sensitively restored or, as in Patan, second of the three ancient capitals that once divided the valley between them, transformed into a well thought out museum. At Bhaktapur, the third capital, the brick paving of the Durbar Square has been relaid, so you are less likely to trip and break a leg while staring up at the erotic Newari wood-carvings.

Between them, these three royal cities offer a brilliant concentration of pagoda-roofed buildings and exquisite sculptures. Maybe there are too many vendors of identical souvenirs and T-shirts. But the Kumari, the "living goddess" of Kathmandu, still peers from behind latticed windows at the crowds below; and the bathing tanks with their serpent-headed sculptures remain little oceans of tranquility.

Turn down any side alley in Kathmandu and there are no T-shirt vendors, just old town-houses with intricately carved doors and Nepali people doing their daily rounds in the same cheerful, timeless pattern.

In Patan's old quarter I watched horoscopes being cast by a royal astrologer whose house fronted on to a peaceful square where children were playing, oblivious to the beauty of the faded brick mansions around them. At Bhaktapur I was happy to be delayed by a wedding cavalcade, complete with red-uniformed brass band. And although the area around the massive white stupa at Bodhnath has been built up since I last visited, the prayer flags fluttering above the Tibetan pilgrims still generate powerful emotions.

It was then that I divined what has changed in Kathmandu since the Freak Street era. Back then it was so difficult to get there that just hanging around became an end in itself. Nowadays most visitors fly straight in, and they tend to use it as a base camp for trekking expeditions, jungle safaris or white-water rafting. There are hundreds of trekking shops and travel agencies to cater for their needs, not to mention new hotels ranging from modern, four-star establishments with swimming pool and casino attached down to basic lodging houses.

Some of the small-town charm may have evaporated; but whereas once it was impossible to eat good Nepali or Newari food unless invited into someone's home, now there are restaurants housed in old merchant mansions (Thamel House) or Rana palaces (Wunjala Moskva), serving delicious food. There are plenty of garden cafés. You eat much better, and are far less likely to catch hepatitis, than in "the good old days". But those who claim Kathmandu is now the Ibiza of the Himalayas have got it wrong. After trekking for two weeks the last thing you want to do is dance all night.