Landnáma, the medieval book of settlements describes Ingólfur Arnarson, a Norwegian fugitive, as the first permanent Nordic settler in Iceland, arriving from Norway around 870 AD and establishing his home in Reykjavík. Myth has it that he threw his high-seat pillars overboard, settling where they washed ashore. This was at Reykjavík (Smoky Bay), but he named the town after steam rising from geothermal vents. According to 12th-century sources, Ingólfur built his farm on Aðalstræti, and excavations have dug up a Viking longhouse there.

Reykjavík remained just a simple collection of farm buildings for centuries to follow. In 1225 an important Augustinian monastery was founded on the offshore island of Viðey, although this was destroyed during the 16th century Reformation.

In the early 17th century the Danish king imposed a crippling trade monopoly on Iceland, leaving the country starving and destitute. In a bid to bypass the embargo, local sheriff Skúli Magnússon, the ‘Father of Reykjavík’, created weaving, tanning and wool-dyeing factories – the foundations of the city – in the 1750s.

In 1786, Reykjavik received its town charter. Shortly after, or in 1798, the Althingi (Icelandic Parliament) at Þingvellir was abolished and re-established in Reykjavik. However, the Danes continued to dominate trade thanks to a monopoly ruling by the Danish Crown. Their control wasn’t eradicated until 1880, after which the influence of Icelandic merchants grew.

At the same time in the 19th century, nationalist sentiments were rising. In 1874, Iceland was granted a constitution, and by 1918 it had become a sovereign country under the Crown of Denmark known as the Kingdom of Iceland.

But it was to be short lived. With the Nazi occupation of Denmark and Norway in 1940, the British and then the US took control in a bid to keep transatlantic sea routes open. Grateful for Icelandic help, the two countries supported Home Rule and then independence in 1944.

Reykjavík really started to boom during WWII, when it serviced British and US troops stationed at Keflavík. The post-war years brought rapid economic progress and turned Reykjavik into the modern city it is today. When Reagan and Gorbachev played out the end game of the Cold War in Reykjavik in 1986, the city emerged as an unlikely tourist destination.

However, since the 1950’s Reykjavík has become unstoppable, throwing itself into the 21st century with full force. In a neat bit of historical irony, the Vikings’ ‘Smoky Bay’ is now known as the ‘smokeless city’ due to its complete adoption of geothermal energy. Although Iceland remains popular with tourists, its economic miracle came to a juddering halt in 2009, when the extent of the local banker’s dodgy dealings became known. While much of the worst has passed, Iceland remains on the global naughty step – although that hasn’t put off tourists. Today, the city is recovering and is almost back to its vibrant best.