I wonder what Rustem Bey would have made of Hisaronu, the mini-Gomorrah that has sprung up on Turkey's southern coast near the ancient town of Fethiye?

Hisaronu is a 10-year-old development of bars, restaurants, shops and cheap hotels and apartments. At night in the height of the season, there is a drunken swaying sea of St George's flags. Vindaloo vies with Hey England on the competing cacophony of sound systems. The Turks, repeating the views they've heard from the snootier Brits, call it Blackpool.

Rustem Bey is the nearest you get to a hero in Louis de Bernières' latest novel, Birds Without Wings. He is an Ottoman gentleman, a man of honour and morality who tries to do his best in the awful times the book describes, the early decades of the last century, when this part of Turkey was a small but horribly bloody sideshow to the Great War and the Greek-Turkish conflict that followed.

Rustem was the aga (leader) of the town that de Bernières calls Eskibahce, but which is now the 'ghost village' of Kayaköy (formerly known as Levissi), and is one of the most poignant, mysterious and enchanting places imaginable.

It was recently the site of a meeting between Greek Orthodox and Islamic dignitaries, who declared the town a site of reconciliation between the two faiths. There is talk of a film version of Birds Without Wings, which will no doubt bear the same wholly worthy message. But before Hollywood airbrushes the history, Kayaköy should be seen as it is now - a beautiful but tragic monument to how Christians and Muslims can live together in peace.

That is how it was in Kayaköy. As you approach the ghost village from the pine forests of the new Fethiye road, you must forget, if possible, the sprawling mass of grey rubble, crumbling buildings and collapsed houses that cover the hillside as far as you can see. Imagine instead how it was: a palette of colour, with houses painted red, blue, green and yellow, ranged across the natural amphitheatre of the foothills of the Taurus mountains.

From a distance, you begin to make out the narrow alleyways between the homes - only wide enough to allow two camels to pass, says de Bernières - and you can also pick out features: churches, minarets and larger, once-grander buildings on the more gentle slopes. You stop at a wide clearing, the meydan, or town square, the scene of much of the action of the novel. Take an Efes beer on a banquette beneath a plane tree, and you can imagine Kayaköy as it was before the terror came.

The town has been hacked out of the hillside, with the ground floor of houses carved out of the hard Anatolian rock. It climbs steeply, so that many of the homes have entrances on both ground and first floors, and ends in a rock quarry at the top of a steep slope. This de Bernières populates with ghosts and graves, but it is an act of literary licence. The real graves, dating from the ancient Lycian civilisation that was centred on southern Anatolia, are in Fethiye.

It's a steep scramble to the top, to a small Christian chapel, long desecrated, from where the whole panoply spreads out before you. In its heyday, Kayaköy was home to around 20,000 people, and had access to the sea via a rough path way down vertiginous cliffs and a beach - now called Cold Water - which is the scene of tragic events in the novel. From the top, you can see the fleshpots of Olüdeniz just a short way off and the cliffs and bays of the Turkish Mediterranean disappearing into the sea haze. It must have been an architectural and sociocultural wonder, a perfect example of humans living in harmony with their environment.

But, as de Bernières pitifully describes, they were not allowed to live with each other. His theme, as in Captain Corelli's Mandolin, is how individuals are powerless in the tide of great historical events. The people of Kayaköy found themselves at the mercy of hatreds the Ottomans had contained, but which were unleashed again by the First World War.

Minorities - Armenians and Azeris at first - were deemed to be disloyal to the Ottoman state, fighting the Allies at Gallipoli in the west and the Russians and Arabs to the east. They were deported from Kayaköy in the first of a series of death marches harrowingly described in the book.

Then the Greeks declared war on defeated Turkey, with the aim of recreating the Greater Greece of the Byzantine empire. There were large Greek populations across the whole of western Turkey - in Smyrna, now Izmir, there were more Greeks than in Athens - and at first they seemed to be winning. Then came Kemal Atatürk, the founder of modern Turkey and saviour of the nation in the war against Greece.

De Bernières does not cast blame, but merely describes the horrible catalogue of crimes committed by Greeks and Turks against each other - murders, mass rapes, burnings, crucifixions of children, as well as other numberless routine inhumanities. Sitting in the meydan over a pleasant dinner with a crescent moon illuminating the village is disconcerting, knowing the cruelties those grey stones witnessed.

In what the diplomats of 1923 called a 'compulsory exchange of populations', the non-Muslim population of Kayaköy was forcibly evicted and marched to Fethiye to board boats to Crete, a land none of them knew, with a language they did not speak and a culture that was alien to them. The same things were happening in Greece, where non-Christians were also being expelled. Now, we would call it religious cleansing.

The Muslim deportees from Greece were meant to repopulate Kayaköy, but it never happened. There weren't enough of them. The Turks were distrustful of Christian houses, Islamic zealots began to vandalise the village as soon as the Greeks left, and the village began to fall apart. There was talk of Christian 'ghosts'. The place was virtually abandoned by 1957, when a huge earthquake made what was left uninhabitable.

Tourism is slowly changing that, and de Bernières' book will hasten the process. A few of the lower houses of Kayaköy have been re-inhabited, and there is plenty of evidence of the town's renaissance in the lively strip of restaurants, bars and shops that lines the main road below the village.

But they are a million miles away, it seems, from the garish nightlife of Hisaronu or Olüdeniz. The local Turks - such as the irrepressible Engin who runs the Istanboul restaurant - want to attract a more sophisticated clientele to this part of the coast. Local planning restrictions mean there will not be a high-rise resort here, and the shrewder Turks are building traditional-style villas or cottages. Vedat and Suzanne, the Anglo-Turkish couple who run the Karmylassos cottages, where I stayed, have the formula right, with three well-equipped and very comfortable villas around a kidney-shaped swimming pool, surrounded by the natural splendour of the majestic Taurus peaks.

Some of the Mediterranean's best beaches are just a short drive away in an open-topped Jeep. Locals complained that Olüdeniz - a magnificent two-kilometre crescent of gently sloping shingle - is too crowded, but it will never be a Benidorm or Torremolinos. There are lots of other beaches, quieter and more isolated, if you explore the coastline a while.

But the beauty of Kayaköy kept my interest for most of my time there. Climbing the old broken stone roads and exploring the abandoned houses was a restorative; imagining the events of the novel taking place around me was a vacation for the mind.

In one marvellous chapter, Rustem Bey, the Ottoman aga who wanted to be a modern Turk, is seduced by the beautiful concubine, Leyla, whom he bought in Istanbul and brought back to Kayaköy. De Bernières conjures up a magically romantic scene of candlelight, Turkish music and tenderness, all in the course of a dinner laced heavily with aphrodisiacal garlic.

After much exploration, I found the house that I decided had to be Rustem's. I stood in the ruins of what had once been an enclosed courtyard, and imagined the aga and Leyla there back in the early Twenties. I closed my eyes for a few moments, heard some gentle notes of Turkish music echoing up from the meydan , and I swear I could still smell the cloves.

Factfile

Frank Kane travelled with Tapestry Holidays (020 8235 7777; tapestryholidays.com). He stayed at the Karmylassos Cottages in Kayaköy. The lead-in price for seven nights' self-catering including flights and jeep hire is £465pp based on a 22 May departure and two people sharing.