The notice reached me from the hands of a beaming postman: “Your package is ready for collection at the central post office.” It was Christmas 1984 and my thoughtful sister had sent me a present in war-ravaged Lebanon. Miraculously, the parcel had arrived intact.

The problem was how to collect it. The central post office, along with the banking district, the parliament, the port, the main hotels and Beirut’s once famous souks (markets) were all located “downtown”, a place most Beirutis would not set foot in at any cost.

At this point in Lebanon’s 15-year civil war, the area was an open scar half a mile wide rising from the coast up to the mountains and dissecting the city in a swath of charred and bombed-out buildings. A few intrepid motorists took their lives into their hands every time they crossed between the two sides at one of the city’s four open corridors.

Otherwise the area was the preserve of Christian fighters on the east and Muslim gunmen in the west, who traded fire day and night and regularly kidnapped civilians who strayed into their lair. At regular intervals the militias also fought among themselves, making Beirut dangerous, exciting and hugely unpredictable.

Clutching my piece of paper, I set off on foot, but had to retreat after shots sizzled over my head, smacking into a building behind me. On another occasion I ventured out with Adnan, a trusted guide, who drove into the area every night. This time the office was closed. Finally, several weeks later, I made it and presented my notice with a huge feeling of satisfaction. I was greeted by an apologetic official who explained that the parcel had been returned because no one had collected it.

It is hard for people who visit the shiny, refurbished Beirut of today to understand how remarkable the transformation has been. The shops are back, parliament has reopened and most of the ruins on show today — with the exception of the bullet-scarred Holiday Inn — are of the Roman variety.

Beirut is the hottest place to be in the Middle East for all the right reasons. On one evening recently, marking the Muslim holiday of Eid al-Adha, it was almost impossible to walk through Place de l’Étoile, the main pedestrian thoroughfare. It was heaving with Gulf Arab families on holiday.

Beirutis could barely conceal their delight that the city was back on the map. Their pleasure was even greater because Dubai — Beirut’s upstart rival in the Gulf — was in the midst of its spectacular collapse at precisely the same moment. Once again the Lebanese dared to dream that their country was back on top.

Nothing demonstrates Beirut’s revived confidence more than Le Gray hotel. It is the latest addition to Gordon Campbell Gray’s stable, which includes One Aldwych in London. It sits on Place des Martyrs, in the heart of the city and once the centre of the civil war. Where snipers previously took up positions, it is now possible to take a dip in the rooftop pool or sip a Martini in the panoramic Bar ThreeSixty. The basement is no longer somewhere to take cover from shells — it houses the spa.

Although no self-respecting Beiruti would think of going out at night in anything other than a flashy new car, it is possible to walk from Le Gray to most of the city’s best nightspots. Gemmayze, the busiest bar district in the Arab world, is five minutes away. The restaurants of Ashrafieh are ten minutes on foot. I even stumbled across an organic farmers’ market near by one Saturday morning.

Although the location is great and the city buzzing, it is still a monumental gamble to sink an investment such as Le Gray into Lebanon when the latest chapter in the country’s troubled history is still unwritten. While the hotel was being constructed in 2006, Lebanon was plunged into a war with Israel.

Shortly after, thousands of supporters of the militant Shia Muslim group Hezbollah staged a sit-in on Place des Martyrs, sealing off the centre and destroying the local economy.

Even now, there are still reminders of the instability beneath the surface. A few metres from Le Gray is the tomb of Rafik Hariri, the former Lebanese Prime Minister and the man credited with rebuilding Beirut. He was assassinated in 2005. Across the street from the hotel are the offices of An-Nahar, Lebanon’s most famous newspaper, whose editor, Gebran Tueni, was murdered later that year. Across the square is a huge mural of Pierre Gemayel, a leading Christian politician killed in 2006.

In all three cases, neighbouring Syria was blamed for the assassinations. The political atmosphere may have calmed, but while Lebanon remains a political football for Israel, Syria and Iran to kick around, the country will remain at the mercy of the toughest kids in the neighbourhood.

None of these problems seems to bother Campbell Gray, who glides through his hotel greeting guests in the Cigar Lounge, calling out to staff by name and generally behaving as though life here was perfectly normal.

Even during the war in 2006, he continued to work on the hotel, while most foreigners were being evacuated to Cyprus by military helicopter. “I never thought of giving up,” he says with a soft Scottish accent. “It never occurred to me that anything would go wrong. These things were a nuisance, nothing more.” The hotelier from Renfrewshire is clearly smitten with the bug that I recognise, having grown up in the city as the son of a foreign correspondent in the 1960s.

Gray has been seduced by the fun, anarchic and enduring appeal of Beirut. War and instability are a small price to pay for the privilege of living in a sexy city. London, by contrast, seems depressing, drab and dull. He already plans to open a beach south of Beirut in Damour and a ski resort in the mountains in Faraya.

This scheme is more than simply offering visitors new distractions alongside trips to the Roman ruins at Baalbek or the Crusader port at Byblos. Gray is attempting to recreate the legendary Beirut of the 1960s, when the city was the playground of the Middle East and attracted the likes of Frank Sinatra and David Niven — and more notorious characters such as the KGB spy Kim Philby.

Its greatest boast was that it was possible to ski in the mountains in the morning and swim in the Mediterranean in the afternoon on the same day.

Will Gray succeed in this extraordinary mission? It is an old saying in my family that Beirut will be restored to its former glory only when two conditions are met: the Lebanese stop at traffic lights and when the Hotel St-Georges reopens.

The first condition has been met — sort of. Lebanese like to drive their expensive cars quickly and with little regard for other motorists, let alone pedestrians. Today, however, there is a reluctant respect for traffic regulations. To my amazement I even found a speed camera erected in the centre of Beirut, although it looked more for show than for action. The St-Georges is proving tougher. It is hard to overestimate the hotel’s significance in modern Lebanese history.

Perched on the seafront, the St-Georges used to be the watering hole for politicians, journalists and spies. A colleague once remarked that when you stepped out of the St-Georges “everyone was minding your business”. As a child I learnt to swim there and returned regularly in the 1980s when the pool stayed open after the hotel’s destruction in the civil war in 1975. Today the hotel cuts a lonely figure — its ruins are a vivid reminder that when the music stops, Beirut can turn from heaven to hell in a flash.