The little Welsh town that inspired a literary giant

The voice takes me by surprise. "Have you seen any of them electric cars here?" it seems to be asking, though I'm not sure I've heard correctly.

I wheel round, quickly tearing my eyes away from the view of the 13th-century ruined castle. A tidy middle-aged man with a striking ginger moustache is closing in on me across the car park. Too late to run. "I'm sorry?" I say. "Them electric cars," he repeats, "I seen them on the telly like. They reckon they'll be everywhere, but I never seen one. Have you?" Laugharne, described by Dylan Thomas as "the strangest town in Wales", seems determined to live up to its reputation.

It's warm – maybe that brings out the cuckoos. But spring has properly sprung and it's no time to be mean-spirited. Thomas catches the mood perfectly in Under Milk Wood.

"The sun springs down on the rough and tumbling town. It runs through the hedges of Goosegog Lane, cuffing the birds to sing. Spring whips green down Cockle Row, and the shells ring out. Llareggub this snip of a morning is wildfruit and warm."

This snip of a morning, I don't even mind if I am drawn into conversation, on the edge of the municipal asphalt, on the vanishing rarity of electric cars. When that's done, I ask the man with the ginger tash if he lives here. "Settled here 28 years ago," he says, "mind you, they still don't accept me."

Dylan Thomas also settled here, spending the last four years of his alcohol-curtailed life in the town. Laugharne, in the great British tradition of misleadingly spelt place names, has more letters than it needs – it is pronounced "Larn". It is officially a town, but that's a rather grandiose title for what is little more than a village perched on the Taff estuary – albeit a very picturesque one. Its main claim to fame is in the (much-debated) suggestion that the fictional Llareggub of Thomas's most famous work was modelled on Laugharne.

Thomas wrote his "play for voices" here. To see exactly where, I take the path from the car park around the perimeter of Laugharne Castle, which commands the mudflats and marshes of the oozing estuary. The castle, with its wrecked turrets and crenellations, is an archetypical romantic ruin that has inspired poets and painters alike – Turner painted it in 1831. Dylan Thomas picked his spot. Having lived in the town at various other addresses, he had his eye on the Boat House for years. In 1949, he finally got his chance, courtesy of his benefactor, Margaret Taylor, who bought the house for him.

The Boat House is now a bijou museum. Some of the rooms have been preserved as they were in DT's time. The house balances on the cliff, an unlikely beacon of domesticity in an elemental wash of sea, sky, clouds, mud and rocks. With home comforts managed by his long-suffering wife, Caitlin, Dylan would retire to his writing shed (a converted garage) about a hundred yards from the house. Bathed in the ever changing play of estuary light and surrounded by the cackle of water birds – cormorants, scoters, lapwings, gulls, sandpipers and herons – the shed is a perfect factory for poetry.

It seems likely that the Llareggub ("bugger all" spelt backwards) of Under Milk Wood is a composite invention drawn from various places the poet lived in. But no matter, Laugharne has become Dylan Thomas's creation anyway – where his work and likeness are milked for every last drop of associative value. There is a Fern Hill B&B named after his famous poem, and Seaview, one of the Thomas homes in the town, is now a hotel trading on its literary heritage. At the aspirational Hurst House hotel, just outside town, Thomas's poster-sized image looks on, entirely appropriately, from behind the bottle clutter of the bar. In souvenir shops you can buy Dylan Thomas CDs, DVDs, books and, I kid not, "Do not go gentle" coffee mugs.

Dylan's favourite bar, however, Brown's Hotel in the high street, is shut and in a sorry state – it was bought a few years ago by Neil Morrissey (Men Behaving Badly), but his plans to redevelop it have foundered. The high street itself comes as a surprise to anyone expecting a typical Welsh village in the sticks. Though run-down in parts, much of it is Georgian and rather grand.

The house we are staying in is a Queen Anne mansion called The Great House – which is an understatement. The first indication of its splendour is the elaborate architrave of the front door. The wonders pile up thick and fast. Graceful carved archways, antique furniture, oil paintings, oriental rugs, sweeping staircase, four-poster bed, heated pool, sun terrace – a little breathless, I ask my 13-year-old son, Niko, what he makes of it. "This house is so ... so ... unnecessary," he splutters, struggling to find the precise words to express himself.

I think I understand what he is getting at. Little in the house is strictly necessary. This is not a house for quotidian existence. It's for luxuriating. Why have a single living room when you can have two? Both are lavishly furnished with an antique bookcase, fireplace and wallowing sofas. The bedrooms on the first floor are oblivious to practicalities. They are cavernous and panelled from floor to ceiling, but there are no wardrobes – the rooms are almost monastic, eschewing ornamentation and spitting at cosiness.

The en suite attached to my bedroom is an Alice in Wonderland inversion of the bed-bath relationship – with bathroom as show stopper. A roll-top tub is stranded in the centre of a vast space within which entire Welsh tribes could set up camp. The walls are scattered with pictures (I count 63 frames), inviting Through The Keyhole style reveries. Who might live in a bathroom like this? Are there clues here in the military memorabilia or the black and white photos of Prague? It's all wildly eclectic – photos of Himalayan peaks jostle sea-scapes, family photos alongside prints of famous Renaissance portraits, and a huge Italianate mural (signed KW Hancock 1933) is screwed crudely to the wall.

"I bought that at a local auction," says Tim Lowe, the owner, when I talk to him later. "I think it's painted by a vicar from the Mumbles Head parish in Swansea." Tim was a captain in the Gurkhas, and now works in the City. He took on the "unloved" house in 1998 and its restoration has been a decade-long labour of love. The building was stripped to its core and reassembled as funds became available "bonus by bonus". The trick, he maintains, is not to over restore, which explains the wave of warped pine flooring that flows tipsily across the first-floor landing.

This intriguing house has been let to us by a new holiday cottage company called Sheepskin, which has hand-picked a selection of similarly interesting properties across Wales. It is hard to leave the house, but the surrounding countryside, Dylan's country, is calling.

Up on St John's Hill, where "the hawk on fire hangs still", the views take the eye down the river estuary and out to sea beyond the gold braid of the Pendine Sands.

The beach and the dunes are owned by the Ministry of Defence. Visitors are faced with a series of increasingly ominous signs: "Danger. Firing Range. No entry" says the first bluntly, the next declares "SECURITY: The emergency state is HEIGHTENED".

I press on, albeit with a mounting sense of unease, down the deserted road, threading through the live-fire zones. I am relieved to reach the public car park, unscathed. Now it's the council's turn to ratchet up the stress – "No Swimming, No Crossing the Estuary, DANGER – Sandbanks, Mudflats, Tides" – says the stern notice.

Out of the car park I get a final warning – "You are now entering a Potential Explosive Site" – accompanied by a graphic image of an explosion. By the time we hit the beach I'm convinced this is the most dangerous spot on earth. But it is also one of the most beautiful. The tide is out and the flats seem a mile wide, to the right the highway of sand stretches west for seven miles up to the village of Pendine.

The surface is so perfectly flat that it was used for attempts on the land speed record in the 1920s. Malcolm Campbell set a series of records in Bluebirds 1 and 2 here, before a fatal crash decapitated another driver and the attempts were stopped. A tragedy – but, as Karl Marx predicted, history repeats itself as farce. I learn later that somewhere on the beach today, Campbell's grandson is breaking the world lawnmower land speed record by hitting nearly 88mph.

The Laugharne end of the sands is blissfully quiet and unpeopled. In the distance, through the shimmering haze, I can see a couple, hand in hand, walking barefoot at the surf's edge.

Much closer, a round man is flying his radio-controlled toy plane – pushing it into angry little circles in the sky. A dog then appears through the dunes – overcome by the vision of endless space – he takes off like an ecstasy fuelled rocket. I wait for him to explode, either by treading on some discarded munitions or, more likely, from pure joy.

Compact Facts

How to get there

Sheepskin (01865 764087; sheepskinlife.com) offers a three-night stay in Great House, Laugharne, which sleeps six, for £855, and a week's stay for £1,875. Sheepskin's prices stay the same year-round, with no premium charged for peak school and public holidays. The cottage rate also includes the company's "concierge-style" service, which provides information on what to experience locally, from shopping to walking, in a guide that is tailor-made for each stay.

Further information

Camarthenshire Tourist Association (www.discovercarmarthenshire.com).