Twenty miles or so off the west coast of Shetland is an island. It measures three and a half miles long by two and a half miles wide and consists, to the west and north, of five mighty hills that rise at their peak to more than 1,300ft and end, abruptly, in the highest cliffs in the country: lob a pebble off the top and it will hit the waves below 11 seconds later. To the south and east there is a bleak lowland strip of rock, bog, peat banks and coarse, wind-flattened brown grass. When the Atlantic storms blow, which at this time of year is almost all the time, it is almost unbelievably windy here; the kind of wind that makes your eyes water as you lean into it and lifts you half off your feet when you turn your back. The sky, consequently, is filled with startled-looking seabirds, many of them flying backwards.

There are reasonable, although not conclusive grounds for supposing that this could be the place the ancients called Ultima Thule, the edge of the known world. It lies on the same latitude as St Petersburg in Russia, and Anchorage in Alaska, and is roughly as far from Aberdeen as it is from Bergen in Norway. London, mercifully, is closer than Reykjavik. But not by much.

This place is called Foula, and it is Britain's most remote inhabited island.

To get here, you can either catch a small twice-weekly ferry, which in winter is more often than not stuck in what might generously - if not very truthfully - be termed Foula's harbour, or take a tiny eight-seat twin-prop Islander aeroplane that flies whenever the prevailing force eight is kind enough to blast straight up or down, as opposed to across, the homemade landing strip. This does not happen every day.

Astonishingly, people live here. It's hard to say exactly how many because they come and go a bit, but at the moment it is 21, 22 or 24, depending on whether you count Magnie Holbourn and his girlfriend, who have been away but appear to have come back, and the baby born four months ago to Amy Ratter and her partner, Wullie. What is more, they profess surprise at the notion that their existence might in any way be considered unusual.

"As far as we're concerned, you're the weird ones," says Marion Taylor, by way of a kindly welcome. "Everyone has to have a roof over their heads and ours is here, that's all. We're just getting on with our lives. We don't really see what there is to get worked up about."

What there is to get worked up about, I reckon, is that if you took 100 people at random and deposited them somewhere like Foula, 98 would probably go mad (I'm not making that up; a Shetland GP thinks so too). Foula is life on the edge. The island has neither pub nor shop, apart from a post office the size of a front porch, which is what it probably once was. Its inhabitants have, however, been able to communicate with the outside world by telephone since the late 1960s, and enjoyed the amenities of running water and a communal electricity supply since the mid-1980s (although at the moment, what with the ferry being stormbound for the past three weeks, the generator is running low on diesel and the power goes off every night at 12.)

On Foula, Christmas falls on January 6 and New Year on January 13, the island having refused to abandon the Julian calendar, which the rest of the kingdom did more than 250 years ago. Nearby Fair Isle, which boasts a population nearly three times Foula's, may dispute the title of most remote inhabited island (it is further from the Shetland mainland, apparently, but closer to Orkney), but I can assure you that in early February, in a southerly gale-to-severe-gale veering west and, so help me, strengthening later, Foula feels just about as far from anywhere as it possible to get in this country without hitting, say, the Greenland ice cap.

For a start, your groceries come in by plane. Greeting the fragile little Islander as it bounces improbably down from the heavens - "So here's the safety spiel," the Botswana-born pilot had said as we took off from Tingwall airstrip, near Lerwick, into a steadily stiffening breeze. "This'll take 15 minutes, your life vest is under your seat, and if it all goes pear-shaped you get out the way you came in" - is a huddled knot of people wrapped in thermals and waterproofs, all waiting for their provisions. Apart from me, Quentin the pilot and a bearded Romanian - who is married to the island nurse and spent most of the crossing chortling to himself at the idea that I seriously expected to be able to get off the island again in three days' time - the plane was mostly full of potatoes and tinned tomatoes.

Not everyone buys in, though. In Foula's southernmost settlement of Hametoun, 32-year-old Amy Ratter, who is related to the Holbourn family who have owned Foula for the past century or so, grows half a dozen different types of vegetable and rears 28 Shetland ewes, two rams, three lambs, 11 pigs, a dog and a Shetland pony called Piper. Like every child raised on the island, she left to go to boarding school in Lerwick when she was 11; like almost all, she didn't return.

"I got a job, bought a house down south, forgot all about it," she says, heaving bags of hay into Piper's cart, which is made from two motorbike wheels, an old bed frame and the upturned fibreglass roof of a Landrover. "But then one autumn I came back to see my mother for the first time in about six years, and I just thought, what on earth am I doing over there, working for someone else? What am I doing living anywhere else but here?"

So Amy came back, moved into her grandfather's old cottage, and started by rebuilding a few fallen stone walls and dykes and fencing in her apportionment of hill grazing. Now she puts in 21 hours a week for the water board, pumping the island's supply early each morning, she is a part-time member of the fire brigade and spends the bulk of her long days working four crofts. It is harder work than most of us will ever know, but Amy is quite clear why she does it.

"Nothing else in this life is going to make you happy but hard work," she says firmly. "Not sitting in an office, not going down the pub, not buying mountains of rubbish from shops; all that'll ever do is break and make you unhappy. Sitting down at the end of the day knowing you've done what needs to be done for your animals, done the best you possibly can by all that's yours; worked hard on your land for you and your family: that's what makes you happy."

That said, Amy did, in fact, meet her partner in the pub, on the mainland. Wullie was a slaughterman from Glasgow up in Shetland on a contract, and once they had got acquainted he came across with her to Foula to show her how to kill and slice up a pig. That was 17 months ago and he hasn't left yet; their son Alex was born last autumn on Mainland, the big island. "Anyone who worries about bringing up a baby here is overestimating the risks," says Amy breezily, feeding the lad in the living room. "This is a fantastic place for a child. In an emergency, the helicopter can almost always come in. And if that's not fast enough, there was most probably nothing anyone could have done anyway." Above her head swing numerous pieces of mutton, drying over the range.

Wullie, keen to be off to feed one neighbour's dog (she is off the island for a couple of weeks) and fix another's roof (part of it blew off in last week's storm), doesn't have much time to chat. "You miss your friends and your family at first, of course you do," he says. "But the compensations are . . . " He waves a hand, inadequately. "Enormous. I just love it here. Can't imagine myself anywhere else."

Later, halfway up the side of Hamnafeld, one of the two adjoining hills that sweep majestically up behind Amy's home, the wind unexpectedly, magically, drops. The sun is out. The sky is wide, and very blue. Foula looks - there is no other word - beautiful. A long way below, a plume of peat smoke climbs into the still air from Edith's croft, where Wullie and his neighbour, 65-year-old Eric Isbister, of whom it used to be said that he had left Foula just two times in his life, "one of them to be born", are up mending that roof.

Everyone I see this afternoon (which is three people) warns me, "You don't get many days like this." And, "Calm before the storm."

Everyone does not, sadly, include Edith, who at 90 years of age has plenty of stories but is not allowed to talk to anyone who has not been on the island for at least four days, for fear they might be incubating something and she catches it. Nor, I am warned, will Edith's nearest neighbour, an emeritus professor of classics in a handsome bungalow across the road, be up for a chat. "People have reasons for being on a rock in the middle of the Atlantic," says Amy, "and they don't necessarily want to talk about them to journalists."

Others, though, prove willing enough to address the question that brought me to Foula, which is, basically: why does one choose to make one's life on the edge of the known world? Once, of course, there were lots more people who did: double the present total when Amy was a child, four or five times as many when Edith was little. The fact that anyone is still here at all is remarkable: since the turn of the last century, officialdom has been asking pointed questions about the viability of a place whose population peaked in 1881 at 267, when there were 33 children enrolled at the school (there are currently two).

Twenty years later, the community was being described as destitute, and in 1927 an authoritative Shetland columnist observed that the island ran the risk of evacuation - a fate that famously befell St Kilda a few years later - in the face of "a rapidly dwindling population decimated by influenza and smallpox" whose "young men and women are all emigrating".

In the 50s, a report advised that essential services such as the school, post office and nurse would be difficult to justify if Foula's population fell below 30. While in an age of instant communications and reliable transport there is perhaps no longer a need for a critical mass of able-bodied inhabitants to fulfil the basic functions, keeping Foula's community going - and in work - undoubtedly requires an effort of political will; for the time being, despite frequent complaints at the expense, that will appears to be there.

According to the extraordinarily tall Jim Gear, the last man to be be born on Foula and who is now nearing retirement after a varied career that has seen him hold down - often simultaneously - the jobs of lobster fisherman, crofter, mailboat skipper, fireman, building contractor, road surfacer, pony breeder and county councillor, the island's low current head count is nothing new; Foula's population has always ebbed and flowed like the Atlantic tides that swirl around it. "It depends on the health of our economy, and on people's confidence in it," he says. "It's a simple equation."

When, as recently as 1990, Foula's new concrete jetty was opened with much pomp and Shetland county council promised a big, fast ferry that would carry more cargo and halve the crossing time to the mainland to little over an hour, the island's population surged to nearly 50. The bubble burst, sadly, when the longed-for new mailboat comprehensively flunked its sea trials.

For long centuries, despite the obvious lack of anything any sane person would dare call a harbour or even a sheltered anchorage (even today, the present ferry, the New Advance, has to be winched out of the threatening water when not in use), Foula made a living from fishing - first for white fish, then lobster. There was a time when Shetland fleeces were in great demand, and lamb. Farm subsidies played their part. Now the fish have mostly gone, netted up by modern industrial-scale trawlers, and nobody makes a penny out of sheep.

So people on Foula mostly do two or three jobs - on the ferry, cleaning or cooking at the school, providing fire cover at the airstrip when the plane comes in, for the water or electricity boards or the met office, repairing the roads, running the post office, doing wildlife surveys, guiding the island's few hundred summer visitors (mainly birdwatchers). A clutch of such vacancies are open at the moment, including the posts of headmaster, assistant and lunch supervisor at the fine new primary school - enough, with a little extra paid activity, perhaps via the internet (yes! Foula has broadband), to give a tough, hardworking young couple or two a fair living.

For this island, all agree, could do with a few more inhabitants. Not too many; a couple of young families would be perfect. What kind of people would they need to be? "Self-reliant, adaptable, fond of their own company, tolerant of other people's views," says Sheila Gear. Another member of the Holbourn clan, she moved to the island in 1964 to marry Jim, whose grandfather landed some time in the 19th century and is still fondly remembered for petitioning Queen Victoria and Disraeli to obtain Foula's first regular postal service. Self-reliant because when things break on Foula, you have to fix them yourself. Adaptable because nothing ever goes quite according to plan. And fond of your own company because the social scene on Foula is not, on the whole, what you might call wild. "This is a community in the sense that when it really comes to it, like when the council threatens to base the ferry off the island, everyone pulls together," says Sheila, mild-mannered and bespectacled behind the post office counter (she is the postmistress. As well as the registrar, and an island guide).

"Otherwise people here keep pretty much to ourselves; we don't live in each other's pockets. It's always struck me about Foula folk that when they're on the island, it's a quick wave and they're away. But if they see each other anywhere else, at some event on the mainland, they'll natter for hours. There is a bond, even though it may not look like it to an outsider."

(Amy is less diplomatic. "Some people don't get on," she says. "It's normal: imagine if someone said to you, right, see those five houses either side of yours? From now on, they're your universe. There would be a few people you liked, a few you rubbed along with and a few you detested. That's what it's like here. Everyone has friends, but no one is friends with everyone.")

Tempted? The material rewards are minimal, but there is, it is clear, a deeper satisfaction to be had from building a life in a place like this. For some people, anyway. There is just one small further hitch, though: any would-be newcomers to Foula would almost certainly have to build their own home. Most of the existing ones are either not for sale, or in a serious state of disrepair. "Whatever they did, they would have to do it by themselves," says Jim. "Unfortunately, the community cannot help anyone out with a house or land; we don't own it."

Twenty-five years ago, Marion and Bryan Taylor did just that, pitching up from Edinburgh, moving into a small cottage and building themselves first two holiday chalets and then their present home, which also serves as the island's B&B. They remain more or less the only Foula inhabitants, apart from the professor, without an ancestral connection with the place. It shows, too: they take the whole business a bit less seriously.

"I just get on with it, frankly," says Bryan, a motorcycle engine-tuner by trade, who now mans the ferry and mends the roads. "A load of nonsense gets talked about living here. I love the place - when I first set eyes on it, in 1972, I thought: this is it, the final frontier. The freedom to live the life you want to live. But I don't get drawn into the politics. They'd quarrel over a fencepost here."

The epitome of indomitable good cheer, the Taylors might disprove Jim Gear's sentiment that to survive somewhere like Foula you may well need Foula, or somewhere quite like it, in your blood. But they haven't always had things easy for all that: a few years ago, Bryan shocked the island rigid by advertising his chalets for long-term rent, and then letting one to an unemployed family from Moss Side in Manchester. They stayed for 18 months, but the episode left its mark. "The shit," says Marion, winking, "didn't half hit the fan."

It is blowing again outside, an absolute hooley. Up at the wild north end of the island, Penny Gear, 38, crofter, pony breeder, relief cleaner, school lunch supervisor, airstrip fire warden, bird monitor and daughter of Jim and Sheila, explains why she came back 17 years ago: "I never saw anything on the mainland that I wanted more than Foula." Why does she stay? There have been times, she concedes, when she has wished it could be easier, "but I've never wished I was anywhere else. I love the freedom, the beauty, the nature, the life. Sometimes I walk over to the headland just to see the rollers coming in. It's breathtaking, always."

Two of Penny's three boys, Paul, six, and Robert, 10, are Foula school's only pupils. She dreads the day Robert leaves to board in Lerwick, although Jack, two, should be taking his brother's place before too long. "But how many parents wouldn't like to drop their children's home and school into the middle of a park, where they can bike to school, the front door's never locked and there's no question of crime or pollution or drugs?" asks Penny. "If that's being remote, it's fine by me."

These days, she says, people expect things to be laid on for them. "Very few people are going to think: I'll go to Foula, build myself a house, do five jobs, get by somehow," she says. "In my parents' day, even when I was young, there was a willingness to do that. I'm not sure there is now."

Fortunately, there is Lynn Robertson bundled up in woolly hat and oilskins, training her dog, Tallulah, to work sheep. Lynn is 18 and a bit shy, but she now lives here, on her own, in the island's only council house, caring for three flocks of sheep totalling more than 100 animals. She was, she says, determined to make Foula her home since the first day she saw it as a child, visiting an aunt who no longer lives here. "It does get a bit lonely, sometimes," she concedes, heaving the barn door shut against the gale. "But it's the way of life. I ... well, I just adore it." Foula could do with a few more people like Lynn.

The plane people have called. Today's flight has been cancelled, and Friday isn't looking like any weather for flying. So it's tomorrow or some time next week, basically. At 10am the next day the wind is screaming stronger than ever, and the skies are sodden and grey. But it's a southerly: straight down the landing strip. Jim and Penny head off to the airstrip on fire duty. The Islander appears out of the clouds, dimly. It looks awfully small. Quentin lands, bumps, jolts, taxies to a halt; out get a mate of Marion's, a man from the water board and a whole lot more groceries.

We take off, pushing bravely eastwards, up to 500ft. Soon, all you can really see of Foula is spray. The edge of the known world is about right. But the edge of the known world is pretty damn magnificent.

· This article was amended on Friday February 29 2008. The airport for inter-island flights between the Shetland mainland and Foula is Tingwall, not Dingwall as an editing slip in the above article made it. This has been corrected.

