FIFTEEN years ago Bilbao was a city dying on its feet. Shipbuilding, its commercial backbone, had fallen prey to global recession and its once-elegant streets began to take on an air of decay. But now, thanks to an unusual lifeline, the northern Spanish city is emerging as a popular destination for holidaymakers seeking a cultural treat.

The opening of the spectacular Guggenheim museum in October 1997 was the pivot on which the city's regeneration turned. Months of lobbying by the city fathers resulted in a decision to build the world's fifth Guggenheim in Bilbao - there are already two in New York and one each in Berlin and Milan.

Renowned Canadian architect Frank Gehry won a competition to design the museum, an outside glimpse of which alone justifies making the short flight from the UK.

Love or loathe its striking modernity, the $100m building is breathtaking. Its ship-like lines reflect the industrial heritage which once occupied the riverside site on which it stands and its thousands of paper-thin titanium panels change hue with the atmospheric conditions, glowing gold after rain and dazzlingly silver in sunshine.

The impact of the architecture continues inside and, if anything, detracts from the exhibitions, which can include anything from Degas and Gaugin to American pop art and a gallery full of motorbikes.

While the Guggenheim is undoubtedly the jewel in Bilbao's crown, the neighbouring province of Cantabria provides natural gems it would be a sin to miss.

Outdoor enthusiasts will want to head for the Picos de Europe mountains. An exhilarating four-minute cablecar ride (not for the faint-hearted) deposits you at almost 2,000 metres above sea level, where pockets of snow linger in June and the air is razor sharp.

It's a hiker's heaven with a network of trails and the chance to stay in low cost yet surprisingly comfortable hostels.

A good base for exploring the mountain area is the small town of Potes, which offers reasonably priced hotels and restaurants, although not much in the way of nightlife.

A car is a necessity for a break in this area - either hire one at Bilbao airport or bring your own on the Portsmouth to Santander ferry.

A worthwhile day trip is to the medieval village of Santillana del Mar, preserved by rigorous planning regulations yet functioning as a living, working community.

Medieval churches and monasteries abound across Cantabria but those well worth dropping into include the monastery of St Toribio of Leibana. And the dose of culture continues as you head back along the coast.

The little town of Comillas boasts a fine palace, a quirky house designed a century ago by Gaudi and an outdoor market offering a great selection of local produce, including sheep's and goat's milk cheeses, strongly spiced sausage and a ridiculously strong alcoholic drink called orujo (pronounce the "j" as in rioja), distilled from grapeskins after the fruit is pressed for wine.

Santander, where the Portsmouth ferry docks, is a pleasant surprise. Far from being simply a port, it is a riviera-style resort with impressive beaches, good shopping and plenty of hotels and restaurants.

All this is marred somewhat by a small zoo on the shoreline where two polar bears are imprisoned in a pen in an environment about as far removed as is possible from their natural habitat.

The drive back to Bilbao takes in the idyllic little fishing town of Castro Urdiales with its storybook castle, church and harbour. It provides the ideal place to wind down after sightseeing and the chance to sample local fish and seafood dishes.

Cantabrian cuisine reflects the province's deeply agricultural roots and its thriving fishing industry. Beef and lamb feature extensively, particularly in the mountain areas, where they are served with other local produce such as chickpeas, cabbage and cheeses. The coast has dozens of seafood restaurants with all manner of delicious fish and shellfish.

Prices vary but it is possible to find a good three-course lunch with local wine for around £10 a head. Alcohol, soft drinks and coffees - which often eat into the holiday cash - are reasonably priced in most places.

With culture and cuisine to sample, this relatively undiscovered part of Spain is an ideal autumn break.

l Brochures and information about Bilbao and Cantabria are available from the Spanish Tourist Office, 22-23 Manchester Square, London W1M 5AP, telephone (0207) 467 5505.