As if the coastline of pint-sized Balkan country Montenegro isn't spectacular enough: tumbling down from the dramatic Pastrovic Hills, naked boulders and terraces peppered with olives and ancient hamlets meet pebble coves and a cobalt blue sea.

But then there is Sveti Stefan, a 15th-century village built on a rocky island that is the postcard picture for Montenegro, and some would say the finest of all the beautiful sites on the Adriatic coast. Moored to the mainland and two perfect half-moon bays by a narrow isthmus, the cobble and stone cluster of cottages was built as a fishing village about 1440.

It has since had several incarnations - as a defence against the Ottoman armies, a casino for Soviet jetsetters, a ghost town after the 1990s Bosnian and Croatian wars, and now, it has been reinvented as a luxury resort by Singapore-based Aman Resorts for well-heeled holidaymakers.

The last has been a vivid transformation, not only for the speck of an island Sveti Stefan, but also for Montenegro, which was left limping and economically tattered after breaking away from Serbia and the Federal Republic of Yugoslavia in 2006.

The island and adjoining Villa Milocer, a stone mansion which overlooks a crescent moon bay and is surrounded by 32 hectares of garden and forest, reopened as a hotel in 2011 after an extensive multimillion-dollar makeover.

More recently, a fully fledged spa and wellness centre surrounded by pine and oak trees and nudging up to its own hidden swimming bay also opened.

The island resort is just as delicious as its setting. Chipping away at layers of concrete laid in the '50s when the island was turned into a casino and hotel for visiting movie stars such as Sophia Loren and Elizabeth Taylor, Aman Resorts has refashioned the cottages as little burrows of luxury, while keeping their fishing village essence. Think shuttered windows, oak parquet floors covered with jute rugs, blackened exposed beams, stone walls and subtle Nordic-styled furniture.

A pretty stone church, partly demolished and concreted up during the communist era, protects the island's northern exposure. In between is a labyrinth of cobbled lanes lined with olive trees and rosemary bushes, tiny stone churches with frescos, swimming pools, cafes, bars and restaurants with sea views.

Villa Milocer is statelier. Built as the summer residence of Queen Marija Karadjordjevic, of Yugoslavia, in 1934, it once housed Yugoslav dictator Josip Broz Tito, who slept in what is now the library downstairs while his dog had the run of the rooms upstairs.

The dog's former playground now houses six suites, all with alcohol-burning fireplaces, silver silk carpets, pots of white orchids and million-dollar views overlooking a private bay and Sveti Stefan Island. Downstairs, a wisteria and vine-covered terrace backs on to hectares of clipped lawns and 800 olive trees.

The recently opened wellness centre is a new building which mimics Villa Milocer. It offers a wealth of well-being activities, from pilates, yoga and massage to an 18-metre indoor pool, all facing a private bay.

Aman offers wellness retreats throughout the year with visiting practitioners.

On the terrace of Villa Milocer I dine on cheese risotto coloured black with squid ink and a whole turbot crusted in salt and baked. It is filleted at the table and served with minced roast garlic and piquant lemon rind chutney.

In true Montenegro style, the servings are huge.

They are matched with Plantaze chardonnay with nougat on the nose from the state-run vineyard behind the hills. The red vranac grape, which is indigenous to this coast, is even more interesting, offering hints of leather and sour plum.

While Montenegrins can be assured that their national treasures have been tastefully and sensitively restored, they cannot access them without table or room reservations, both of which require a handsome wad of cash, but the walkways are open to the public.

They curve around the coast from the two beaches in front of Sveti Stefan and the village of the same name, connecting to the gorgeously quaint village of Przno.

Here, a clutch of tiny cafes with wooden tables perched over the beach offer freshly caught calamari grilled with lemon and mussels cooked in their shells with a garlicky tomato sauce. The dishes are perfectly accompanied by wine grown on the adjacent terraces.

Food features well here because there is little else to do at Sveti Stefan except take gentle strolls along the waterfront and sit on the beach and soak up the beauty.

The writer was a guest of Aman Resorts.

TRIP NOTES 

GETTING THERE

The cheapest and easiest way to get to Montenegro from Sydney is with Emirates and Croatian Airlines via Dubai and Zurich to Dubrovnik. From Dubrovnik, Sveti Stefan is a three-hour drive down the stunning Adriatic coast. See emirates.com.

STAYING THERE

The island of Sveti Stefan has 50 rooms and cottages and is open from May 1 to September 30. Rooms start from $790; cottages $1005. Villa Milocer is open year round, with suites starting from $1000. See aman.com.

MORE INFORMATION

montenegro.travel/en