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Far below and across the bay, a huddle of whitewashed houses and tavernas hugs the foot of a mountain, forming a crescent along the shore. A jetty extends a sheltering arm for a tiny fleet of fishing boats, moored in moody-blue water. The scent of sage wafts down from the hillside that is sprinkled with spring poppies and camomile. A donkey guffaws and goat bells tinkle somewhere in a meadow.

Sitting on the veranda of the Aegialis Hotel, on the Greek Cyclades island of Amorgos, Irene Giannakopoulos looks down at the village of Aegiali. A decade ago, her husband looked up from the beach extending from the village and had a brainwave. "He said that it would make the perfect place for a hotel," Irene remembers.

Each airy room at the Aegialis Hotel, following the contours of the hillside in terraced layers, looks out on a version of this view. An ample pool spreads across one terrace, and the Corte Club is hidden at the hotel’s base, but the Aegialis is a safe haven from the disco terrors of the package tour group. The hotel’s cheerful restaurant, though hardly of gourmet standard, is hard to beat for the soft seascape sunsets from its veranda.

Not all ships dock at Aegiali, but the hotel will send a minibus to pick up guests disembarking at the bigger port of Katapola to the south-west, in the centre of the island. "We get plenty of nationalities: Swiss, Scandinavians, German, Italian. Many French people come to see where Luc Besson filmed scenes from his movie The Big Blue. But we don’t depend on mass tourism, and we don’t have a big operator. People come here independently."

Greek islands don’t come any more beautiful than this, but if too many people discover it, that essential beauty could be endangered. There is no airport on the island, unlike the package magnets of Santorini to the south and Naxos to the north. Accommodation is mostly in the form of small guesthouses, villas or pensions and domatia, and the Aegialis is clearly the island’s biggest and fanciest hotel – so far. The craggy, steep-faced island has a few good small beaches, but not enough to make it a bather’s paradise. Yet the population of about 1,800, on an island which is just 30 kilometres from end to end and five at its widest point, cannot afford to shun its tourist earnings.

Most of those earnings are from more intrepid tourists, and many come here for hiking holidays. British couple Paul and Henrietta Delahunt-Rimmer operate the nearest thing the island has to package tourism - but it’s of a decidedly alternative nature. Their eco-tours include guided, tailored walks through some of the island’s more remote corners. Groups never number more than a dozen, and the walks are peppered with information about the varied fauna and flora as well as historical detail. Guests are housed at the small Hotel Pagali run by Nikos Vassalos in the village of Langada, a winding ten-minute drive above Aegialis. The sumptuous, largely organic fare at Nikos’s restaurant is one the culinary highpoints of the island.

The Delahunt-Rimmers have lived on Amorgos for five years and are members of the tiny community of the 300-year-old hillside village of Strombos. Strombos has no electricity or mains water, and its small, whitewashed houses perch at the end of a rugged donkey trail close to a ravine. Their neighbour in this little outpost of English eccentricity is a compatriot in her 60s, Carolina Mathews, who spends much of the year here alone, tending her olive grove, smoking Karelia cigarettes and sharing secret shady spots with her cat. In reply to the obvious question as to how she came to live in such a remote spot, she replies enigmatically: "Well, you know, one thing leads to another."

Paul Delahunt-Rimmer, a retired RAF pilot who still sports his trademark moustache as well as his title of Squadron-Leader, and Henrietta are active advocates of eco-tourism, and have submitted an impassioned paper to the European Union on eco-tourism in the Greek islands. "Short of a nuclear explosion there can be nothing more damaging to remote locations such as the Greek islands than sudden unplanned tourism development," the paper pleads. "The consequences to the physical environment may well destroy the very resource that attracted the tourist’s attention in the first place." Mercifully, the island villages fill for up for just six summer weeks, says Delahunt-Rimmer, when the Athenian hoards escape the city heat.

One of the Delahunt-Rimmers’ favourite ‘tasters’ for longer explorations is a four-kilometre hike from Lagada beneath the slopes of Kroukellos, the island’s biggest peak at 820 metres, to the monastery of Theologos. Goat bells and donkeys again provide the pastoral soundtrack. The small 5h century Orthodox monastery, close to some precipitous cliffs, is the favourite haunt of the monk priest Papas Spiros. With his black gown and wild beard, he poses reluctantly for visitors’ cameras: "Don’t use those pictures to frighten your children," he jokes.

The seclusion of the monastery now serves the purpose of spiritual retreat, but originally ensured defence from the historical threat of Saracen bandits. Security was the strategy for the elevated construction of villages and churches all over the island, most notably the remarkable Monastery of the One Wall, or Khozoviotissa, on the sheer southern side of Amorgos. This monastery was probably founded in the 11th century, and according to local legend its purpose was to accommodate an icon of the Virgin Mary that had been broken in two and desecrated in Cyprus during the Arabian persecution of the Christians. The icon, says the legend, had been spontaneously and miraculously reconstructed when washed up on the shores of Amorgos. The Panayia icon, as it is known, remains a subject of veneration, and is ceremoniously paraded around the island at Easter from church to church and shrine to shrine, drawing reverent, feverishly genuflecting crowds and bouquet tributes.

The two remaining monks residing in Khozoviotissa look out each morning on a heavenly view. Embedded in the cliff above the lucid blue Aegean water, the whitewashed monastery shimmers like a jewel displayed in a brooch of rugged stone. The promontories of Amorgos hover on blankets of mist, and the distant silhouettes of other islands in the Cyclades group shimmer on the horizon.

Ancient history pervades the place, yet the simple genius of the monastery’s design is a more perfect expression of harmony between architecture and timeless nature than almost anything achieved with that ambition in the modern era, by Alvar Aalto, say, or Le Corbusier, who is said to have been inspired by its construction. The monastery has evolved from its original incarnation, and no single draughtsman is attributed with its conception.

You approach the monastery along a steep stairway that starts from the end of one of Amorgos’s precipitous roads. The thrill of mystical seclusion mounts as you climb, blinking, towards the foot of its glaring white walls, then up to a small door. Inside, you ascend through a narrow passage to a tiny chapel, a couple of metres wide. The camera-shy Orthodox monks are rarely to be seen, ensconced in their private rooms until the tourists depart.

A short distance above Khozoviotissa, perched in the hills above the port of Katapola, lies the village of Chora, with its blinding alleys, unrushed tavernas, handful of souvenir shops, and a cluster of snow-white churches, with the remains of a castle clasped to a rocky outcrop at its heart. If you’re lucky, you’ll see the villagers demonstrating how to make the tooth-endangering pasteli confectionery, made from sesame seeds and honey, or watch the boys taking turns at pulling the bell ropes in the village square.

It’s not quite the town that time forgot, although it feels like the town that forgets time. But don’t tell that to the matronly Lila Marangou, curator of Chora’s archaeological museum, author of a book about the Monastery, and the big authority on Amorgos history. Wander from her charge while exploring the ruins of ancient Minoa above Katapola and you risk incurring her humiliating wrath. "You are in a group and you must stay with the group," is her admonishment to any her dare to wander from her charge.

Chora’s villagers, like most of the people of Amorgos, are generally much less severe. They welcome the trickle of tourists cheerfully and gratefully, without lamenting their isolation. "The lack of transport to the island is one of our biggest problems, but it also means that the unique character of Amorgos can be preserved," says Vangelis, a taverna cook in the village, gesturing with a fat three-fingered hand.

Above the village, overlooking the sea and the sweeping green hills to the south-west of the island, a row of sail-less windmills perch, like disused props on the stage of some over-sized outdoor theatre. The fierce pink stain of the sinking sun smears the curve of Naxos to the north. A scrawny cat mews in a darkening doorway, a gull wails, and here at least all is well with the world.

Read more travel writing by Tim Bird