Visitors to Athens can already enjoy the fruit of the city's labours as it undergoes a £7 billion upgrade in preparation for the 2004 Olympics, but the cost of attending the Games looks set to be stratospheric.

Although the Greek capital's extensive facelift is still very much a work in progress, the results are beginning to show. The Hilton hotel reopened last Tuesday after a £65 million revamp. Following suit next month, after a £46m overhaul, is the Grande Bretagne hotel. And recently completed pedestrianisation allows you to walk around much of the infamously car-crammed city centre without a motor in sight.

Greek National Tourist Organisation director Panos Argyros said: 'This is bringing us back to the good old days. To stroll around without cars, enjoying old entertainments and old cuisine newly offered, it's like a taste of the old, even ancient, Athens.'

Infamous for its air pollution, litter and stray dogs, Athens has made extensive efforts to clean up its act. For several years now cars have been given official numbers, and every day either odd or even numbers are banned from the roads.

Recent emissions tests show pollution levels have dropped by 40 per cent over the last four years and the frequency of rubbish collection services has been increased. An area of land north of the city has been turned into a sanctuary for some of the region's 20,000 stray dogs following concerns by animal rights activists that strays would be poisoned and killed in a clean-up before the Games.

Meanwhile, by the time the Games begin on the 13 August 2004, more than one million new bushes, 290,000 new trees and 11 million new shrubs will be thriving throughout Athens.

Plagued by local political wrangles and a subsoil full of archaeologically important artefacts, changes to the infrastructure have been more tortuous. But the reports of the International Olympic Committee have been getting more positive since the nadir of 2000 when shocked officials threatened to withdraw the Games from the city, as so little work had been done.

The renovated and extended metro system has been up and running for a year after a construction programme regularly delayed by the discovery of artefacts in the ground through which workers were digging. The solution has been to clear the items aside and display them for metro passengers.

'The trains are now running through a museum,' said Argyros.

The shiny new Venizelos airport suffers none of the problems of the old airport on the coast, which has been turned into a metropolitan park. The surrounding coastline has been cleaned up so successfully that fishing is being practised for the first time in 20 years and all the beaches have been awarded EU blue-flag status.

Travellers to Athens will find a city in the middle of a whirlwind spring clean. There are building sites everywhere. The famous National Archaeological museum, amongst others, is closed for renovation until May 2004. Currently 27 of the 32 Olympic projects are under way, with the last five due to start by the end of February.

'They will pull it out of the bag,' said Noel Josephides, from Greek holiday specialist Sunvil, 'they always do.'

Despite these improvements, the blot on the landscape is the likely cost for tourists visiting the Games. The pricing of Athens hotel rooms for the Olympics is 'a disgrace' according to Josephides: 'I would swallow an increase of 50 per cent but hotels outside Athens are adding 300 per cent, and the prices I'm being offered for hotels in the city are too high to contemplate offering customers.

'It's a great shame, bad news for Greek tourism and bad news for everyone.'

Accommodation for the Games does not go on sale until 1 May, but price indications are that three nights' three-star B&B with flights will cost from £1,775. Given that flights to Athens can be bought for £58 with EasyJet this seems expensive.

One reason for the high prices is a shortage of hotel rooms. With tens of thousands of spectators expected to join the more than 20,000 Olympic officials, only 4,000 new rooms are being built. 'The cartel of hotel owners undermined the construction initiative,' said a local journalist. 'They were worried that after the games finish there would be too many empty rooms which would drive prices down.'

Thus, many Olympic tourists will stay in alternative accommodation. Athenians are being encouraged to rent out their homes to visitors, while 12 large luxury cruise ships will be moored in Piraeus harbour, offering 6,500 cabins.

Olympic Airways flights to Athens for the same period will not go on sale until the end of August, and they are expected to be more expensive than this year.

Despite the hiccups, it looks like Athens is finally taking up the position in the travel market that it deserves. For a long time it has been seen as too expensive for the quality of service on offer. Josephides said: 'Athens has always had the wrong image. It's got incredible potential as a city, which is being realised by the Olympic revamp, and I am confident that it will be a very big short break destination in the future.'

Athenian historian, Alex Sarantis, agreed: 'To understand the transformation go to the central metro station at Omonia. It used to be a urine-soaked hole full of vagrants, now it's a gleaming, marble-floored wonder.'