In the cafe of Vienna's Sacher Hotel, waiters serve coffee with cream and slices of the famous Sachertorte to visitors from around the world, continuing a tradition which began over a century ago. Back then the hotel had newly opened in the heart of a vat empire which included all or parts of what are now Poland, Czechoslovakia, Hungary, the Ukraine, Rumania, Yugoslavia and Italy. Today, many of these nations were again calling for independence from a distant, oppressive regime. Whereas the collapse of the Austrian Empire in 1914 catapulted the world into the Great War, these recent events held the promise of a delicate, though lasting peace.

It was little more than a decade since the collapse of the Berlin Wall had sent tremors of reform across Eastern Europe. Czechs were out in the streets of Prague, demanding the resignation of their hard-line leaders. Free elections would be held there in the coming weeks. Six months earlier, Hungary had been the first of the Soviet satellite nations to open to the West. Further east in Rumania, the citizens of Bucharest were preparing to put an end to Ceausescu's reign of madness. Virtually overnight, the Iron Curtain had become a tattered veil.

"Here we are in the middle of East and West", said J.J. Szalanski, the young Managing Director of the Sacher Hotel. "While we are considered part of the West, we have more in common with Budapest or Prague. At the moment they are communist cities, but in two years' time or even sooner, who knows? Maybe not.

"These changes are good for Vienna and good for Austria. Do you know that today Budapest is booked out, whereas Vienna is not? This is because Budapest is something new for people; it is truly a foreign city and also very cheap at the moment. The problem I have is taxes. A cup of coffee is twice the price here, but this will change in 1992 with the E.E.C. when I will be able to compete. Then in 1995, together with Budapest, we will host a World Exposition. This is the first time that two cities will host a World Expo and I think that because we are from opposite sides, so to speak, this is very important not only for ourselves, but for East and West".

Despite having developed one of the most sophisticated tourism industries in the world over recent decades, Austria has lagged behind other European countries in terms of tourist numbers largely because it has been considered too far east to be included on the itineraries of visitors to Western Europe. It comes as a surprise to some visitors to Vienna to learn that they are in fact further east than Prague and that the border with Hungary is only fifty kilometres away. As border blockades collapse, creating the possibility of travel to countries once familiar but now strange new lands, Vienna is poised to become one of the most important gateways between East and West. Then again, some of the locals will tell you in a matter of fact way that it has been already for two thousand years.

Apart from one night spent in Bregenz some years ago, having driven across the border from Switzerland, this was my first visit to Austria: a ten day "familiarisation tour" of the country in the company of six fellow-Australian journalists and one New Zealander, all of us flying, wining and dining courtesy of the Austrian National Tourist Office and Lauda Air.

Accompanied by experienced local guides along every step of the way - amongst them an author, an historian, and a Supreme Court judge - our tour would lead us from Vienna to Graz, the capital of Styria and Austria's second-largest city; then to Innsbruck of Winter Olympics fame; next Mayrhofen, an alpine village resort high in the beautiful Ziller Valley; and on to Salzburg - heavenly Salzburg, the City of Mozart - before returning to Vienna where we would each go our separate ways.

We departed in the middle of November last year aboard the first international flight to touch down in Phuket, Thailand, the significance of which, at four o'clock in the morning, seemed to be lost on the bleary-eyed faces of the Thai customs officials. This was not the case for Daniele Kirchmair, Lauda's Catering Manager, who had spent the previous three days and nights ensuring that the meals prepared in the Phuket catering station were of the same standard that has established for Lauda an unsurpassed reputation for airline cuisine.

Last year the VIF Gourmet Journal rated Lauda Air first for meals and service in both First Class and Business Class categories. This was a triumph for Lauda, firstly because no other airline had achieved this dual rating before and secondly, because Lauda has no First Class, only Business and Economy. It was proof that Niki Lauda, who founded the airline in 1979, is achieving his promise of "First Class service for Business Class passengers".

Niki Lauda, three times Formula One motor racing champion who now lives permanently in the Sacher Hotel when not flying his own aircraft, is still a national hero in Austria, particularly to those in the tourism industry. Not only has he challenged state monopolies and emerged with the country's largest private airline, he has greatly lifted Vienna's profile as a first-stop European destination. Only months after Lauda Air's first scheduled flight to Sydney last year, bookings reached ninety per cent and the number of Australian passengers continued to increase almost daily.

Within hours of our arrival in the Austrian capital we were comfortably ensconced amidst many of the elements which make up the image of Vienna that exists in the popular imagination. "The name Vienna", wrote the British philosopher Alan Jarnik, "is synonymous with Strauss waltzes, charming cafes, tantalising pastries and a certain carefree, all-embracing hedonism". In the upstairs dining room of Demel's, Vienna's most famous pastry shop, we savoured the delights of some of the above-mentioned delicacies and chose from twelve different types of coffee, whilst deliberating over whether to seek tickets for Cats, Les Miserables or The Phantom of the Opera, all playing concurrently in town.

We had walked from our hotel near the Danube Canal along the grand Ringstrasse (Ring road), past the gothic Votiv Church, the Greek Temple-styled Parliament building and the baroque splendour of the Hofburg winter palace before entering the narrow, cobble-stoned streets of the old city. Equipped with a Vienna from A to Z booklet, we matched the numbers therein with those on metal shields affixed to important buildings and read something of the history which lurked behind each doorway. At various locations our guide would add, "Beethoven was thrown out from here for being too noisy. He was deaf, as you know, and used to play his piano and thump on the floorboards at all hours of the night", or, "Mozart wrote his last three symphonies in this house".

Later in the afternoon we stopped at the Cafe Central, where, at the turn of the century, the likes of Robert Musil, Karl Kraus, Alfred Polgar and Hugo von Hofmannsthal would sit and argue all day long over a single cup of coffee. Together these authors shaped and recorded one of the most fertile, original and paradoxical periods in the history of all the major Arts as well as in psychology and philosophy. It was a time perfectly described by one of their successors, Hermann Broch, when he called it "the gay Apocalypse".

Fin-de-Siecle Vienna is remembered with great nostalgia as the golden age of Vienna when the old city wall was demolished and the magnificent Ringstrasse, along with a new Imperial Palace, Parliament and two museums, rose in its place. Vienna was transformed into the elegant city we know today and became the cradle of much of twentieth century culture.

Over a period of only three decades, the works and ideas of a host of great Viennese thinkers and artists amounted to a cultural renaissance comparable to that of Italy. Among them were the psychologists Victor Adler and Sigmund Freud; the architects Adolf Loos and Otto Wagner: the artists Gustav Klimt and Oscar Kokoschka; the composers Arnold Schonberg and Gustav Mahler and others till. Meanwhile, Karl Kraus, the most penetrating social critic of the time, described this same Vienna as "the proving ground for world destruction".

"Somewhere there lurks a grim Fate which may enter upon the scene at any moment", wrote Robert Musil. "It might simply be death, or it might be something else, something unimaginable, which Fate has up its sleeve. Destiny bides its time..." In the "City of Dreams", Theodore Herzl emerged as the prophet of Zionism while George Ritter von Schonerer advocated the use of violence as a political means, having a profound influence on the house painter and would-be architect, Adolf Hitler.

No other European country experienced a more complete break with the past than Austria as a result of the First World War. It emerged, severed from its vast territories and, with the collapse of the Hapsburg dynasty which had ruled for 640 years, searching for its national identity. Two decades of economic and political turmoil followed and then, in March 1938, German troups marched unresisted into Vienna and Austria was incorporated into the Third Reich.

It is now only thirty-five years since the Austrian State Treaty was signed and occupying Allied troops left the new Republic to rebuild and discover a future for itself in its new role as one of Europe's smallest countries. Buoyed by strong support from the tourist dollar. Austria is as prosperous today as it ever was.

Since the European Conservation Year in 1975, Austria has spent hundreds of millions of Schilling annually on the restoration and renovation of historic architecture and as a result its cities have retained much of their character and old-world charm. The old city centres appear to be frozen in the time of the Empire. Indeed, wherever one turns in Austria, it is impossible to escape the fabric of history.

In Vienna, returning from Schonbrunn Palace, we walked into the fashionable Stadtbeisl restaurant only to be shown downstairs into cellars constructed in the 13th century. A section of the exposed wall, we were informed, was part of Roman fortifications of the city, built around 100 A.D. Behind the wall, a network of catacombs intersect, leading directly to St. Stephens Cathedral.

In Graz, one's attention is unavoidably drawn to the bell tower atop the Schlossberg, the wooded rock which dominates the city. The people of Graz paid the French not to destroy the bell during the Napoleonic Wars and today it rings out over the city as it has done since 1588. In the centre of town - one of the best preserved baroque cities in Europe - the Graz Armoury contains over 27,000 pieces of armour and weapons last used in the 17th century and yet the Armoury is not a museum as such: its curators repair and maintain its contents, as if awaiting a signal form the Schlossbert that the Turks had been spied approaching the city.

If Innsbruck today shows the effects of over a century's development into one of Europe's most popular centres for skiing holidays, with some 240 winter resorts throughout the state of Tyrol, one can still enjoy a traditional Tyrolean feast in many of the city's restaurants and experience the Innsbruck of yesterday. Innsbruck's oldest hotel, the Goldener Adler, celebrates its 600th birthday this year. The cafe downstairs was once a stable for coach horses and upstairs you can stay in the room previously reserved for the author Goethe on his numerous treks between Italy and Germany over the Brenner pass, or the room in which the Tyrolean hero Andreas Hofer stayed after defeating Napoleon's troupes outside the city. Hofer lost his third battle against the French and was executed. He now rests in the hofkirche built for Maximilian I.

Many of the oldest buildings in Innsbruck's centre are from the gothic period, their foundations and inner walls built from round rocks taken from the River Inn which runs through the city. Innsbruck's name is derived from "Bridge over the River Inn". In the city square is the "Golden Roof", a balcony of gilded copper tiles built by Duke Friederich, known as "Friedl the Penniless' who commissioned the roof to give lie to the state of his finances.

"We have a proverb here in Austria that says that a man without a past is a man without a future", Roswita Holz, our guide in Salzburg told me. "History for us is a vital part of today and our old cities with all their culture will be our homes in the future". I recalled that the Austrian satirist Alfred Polgar had put it another way when he wrote, "Austria faces the past with confidence".

We were dining at Winkler's Restaurant perched on top of the Monschberg, one of the two mountains which tower above either side of Salzburg. Through floor-to-ceiling windows we looked out over one of the most beautiful cities in the world ... Salzburg, the Baroque City, the City of Churches and Mozart. spotlights illuminated the church steeples, reflected in the calm waters of the Salzach River.

During the day we had visited Mozart's birthplace at Getreidegasse No. 9, now converted into a museum which contains his clavichord, is first violin, early compositions and paintings of his family. After dinner we were to attend a concert of works by Mozart, Beethoven and Schumann in the Marble Hall of the Mirabell Palace where father Leopold Mozart performed with young Wolfgang and his sister Nannerl. To experience the music of the world's greatest composer in the city where his symphonies came to life is for the lover of music one of life's most precious moments. To borrow the words of Frederick Grunfeld, author of the Newsweek publication Vienna, it is also "a kind of time machine that can bring the perceptive listener far closer to the 18th century than any number of historical treatises".

While other countries may surpass Austria for museums, churches and palaces, no country equals its musical heritage. Perhaps as much as two thirds of the history of classical music was written here. Beethoven, Mozart, Haydn, Schubert, Johann Strauss the Elder and the Mahler, although not all from Vienna - some not even from Austria - all made their reputations there.

Indicating just how seriously Austrians as a whole regard their music, one commentator suggested that the Vienna State Opera is the country's heart and the Vienna Philharmonic, its soul. Many believe that the tope job in the country is not the President, but rather the Director of the Opera and the Viennese are almost certainly the most critical and educated audience in the world. While Austrians lavished faint praise on many of the world's musical greats during their lifetimes, they are certainly making up for it now. Salzburg and Vienna lead the world's music festivals and next year's Salzburg Festival commencing in late July will be one of the most important since its inception in 1920. In 1991, Salzburg will lead the world in celebrating the 200th anniversary of Mozart's death. Gaining in importance with every year is the Graz music festival held in October. Many famous artists start their careers in the Graz Opera House. Graz is the avant garde capital of Austria, the legacy of its large student population.

"Somehow in Austria, everything seems to come back to music ... search for a metaphor and you are bound to come up with something musical", wrote Kenneth Loveland, senior British music critic and a veteran of over thirty Salzburg festivals. One such metaphor directs us to Viennese cuisine, described as "a symphony in a pan", referring to the fact that during the days of the Empire, influences from all over Eastern Europe were blended harmoniously in the hands of Viennese chefs into a cuisine unique to the city. "Vienna was a melting pot for so many influences", says Raimund Jeschek-Fritsch, the Executive Chef of the Imperial and Bristol Hotels. "here we have the only cuisine that is linked to the name of a city. You have Italian, French and British cuisine, but nothing as unique to one city as Viennese cuisine".

A first-time visitor to Austria would be well-advised to watch his or her weight, for to those accustomed to the portions and lightness of nouvelle cuisine, Austrian meals are copious and until quite recently were extremely heavy. The tastes of Western tourists and the influence of nouvelle cuisine have seen chefs break from some centuries-old practices which were developed in times when nourishment took precedence over delicacy of flavour. Austrian cuisine has many magnificent highlights, impossible to convey here and is most notable for its consistent harmony of flavours. Once can be confident when ordering anything on the menu, though never confident of finishing everything on your plate. Soups are popular, such as Leberknodlsuppe (meat broth with liver dumplings: main meals of course are best characterised by the ubiquitous schnitzel, and Austrian pastries - the famous strudels, Guglhupf, knodels and souffles - provide an unforgettable piece de resistance. A glass of schnapps is always a welcome aid for digestion after a satisfying meal accompanied by fine, fruity local wines.

Austria has a long history of wine culture, dating back to the Celts who planted the first vines around 400 B.C. The Frankish conqueror Charlemagne encouraged monasteries and bishoprics to make wine in the 9th century and many monasteries continue their wine-making traditions today. As one would expect, little is known of the quality of Austrian wine in past centuries, except for the fact that the vintage of 1465 was one of the worst ever. Most of the year's wine was poured into rivers, however legend has it that some was used to mix mortar for the construction of the spire of St. Stephens cathedral. The next-worst year for Austrian wine was in 1985, when the infamous Anti-Freeze scandal all but ruined the prospering industry. Ninety-five per cent of winemakers were blameless, however exports dropped from 400,000 hectolitres in 1985 to a mere 90,000 the following year. To ensure against anything like this catastrophe occurring again, Austria now has one of the strictest legislations controlling wine production in the world.

Austria's wines are typically fresh and fruity, usually made to be drunk while still young. The climate and soil conditions produce in a good year, some of the best whites in the world. It has only been in the last decade, however, that advancements in viticultural techniques such as small oak maturation have given the country's light reds some much needed complexity. There are eleven principal varieties of white wines, most notably the Gruner Veltliner, a dry, fruity wine from Lower Austria and the elegant, dry white, Welschriesling from Burgenland and Styria. There are six principal red wines and Blau frankisch is one of the best, from Burgenland, the home of the finest reds.

If the cafe is Vienna's best known cultural institution, none approaches the Heuriger for a taste of the local atmosphere and culture. The Heuriguer is the house of a wine grower who is licensed to sell his wines on the premises along with local specialities. Their common feature is a fir branch wreath hung on a pole outside the house - signalling that the new wine is on sale. The wine is served in quarter litre mugs and said to "loosen the tongue and Viennese heartstrings", while often a Schrammel quartet plays sentimental Viennese songs. One of Vienna's most popular is "Mayer am Pfarrplatz" in the district of Heiligenstadt. The house has been owned by the Mayer family since 1683 and today is run by Australian-born Mario Galler who is married to the owner's daughter. Beethoven lived in this house for a short time and according to Mario, Mayer's wine was the inspiration for his 9th symphony.

If one word could sum up the atmosphere one experiences in so many ways in Austria it would be Gemutlich; the heart felt feeling of intimacy and comfort; the sense of friendliness and welcome into a world inordinately rich in artistic and cultural treasures, ever-prepared to share it with those less blessed.