Madrid is one of Europe's great cities, but to get the most out of a visit it helps to have someone with local knowledge to guide you to the most happening spots and hidden treasures. Thankfully Nina Derham is on hand to provide her very own personal tour of Spain's wonderful capital city.

The charms and delights of Spain's capital city remain well-kept secrets to this day, as many people opt for a trip to the country's beach resorts or Gaudi's Barcelona without giving Madrid a chance. Your average capital it is not - the absence of an iconic edifice like the Eiffel Tower or Big Ben and a relatively short list of tourist stop-off points means that to truly discover Madrid one needs to scratch well beneath the surface. And those who do are quick to become hooked on the intangible urban treats showcased within this very special metropolis.

Spain's liberation after a 39-year dictatorship is relatively recent and things that are part and parcel of everyday life in other parts of Europe are still very much "happening" here in Spain - most notably in Madrid. From Bollywood festivals aimed to embrace a new wave of immigration in the capital, to one of the largest Gay Pride festivals in Europe, Madrid is evolving fast and furiously. At the same time however, a hard-hitting sense of pride about being Spanish and the determined maintenance of traditional values and fiestas appear to be in no danger of waning.

Madrid's very manageable city centre is best explored on foot, especially if you want to soak up the unique identity of each neighbourhood. This allows you to experience first hand the emergence of a new city that is, both visually and culturally, a massively exciting place to be.

Any trip to the Spanish capital should start in Los Austrias, Madrid's most traditional and aesthetically pleasing neighbourhood. Steeped in history, this central area of the city has a lot to keep the visitor busy and is dripping in architectural delights. The grand Palacio Real (Royal Palace), the enigmatic Plaza Mayor and the city's oldest square, Plaza de la Villa. However, the most seductive aspect of this beautifully preserved part of old Madrid are the charming secluded plazoletas tucked away down tiny alleyways from the main streets, where life carries on at a small town pace. A personal favourite is the minuscule Plaza Biombo, just one block back from the frantic Calle Mayor. Shaded by trees and offering a couple of little cafes (and one very nice restaurant), it is a real gem to stumble upon. Just around the corner, El Anciano Rey de los Vinos has been a favourite with locals for over a century. Overlooking Madrid's Catedral de la Almudena, it's the perfect spot to sip on vermouth and soak up a bit of true Spanish life.

Crossing over the Puente de Segovia you enter into a network of tiny streets known as La Latina. Traditional Spanish terraced houses dominate, their brightly painted facades illuminating the narrow walkways. Wander from plaza to plaza during the hazy fuzz of the afternoon for an entirely peaceful experience. By night however, this classic neighbourhood transforms, brusquely shaking off the sleepiness of the siesta as countless trendy bars open their doors to the city's night owls. Things start hotting up around 10pm along the Cava Baja, Calle Almendro and Plaza de la Paja. Give your taste buds a treat and indulge in some tapas before joining the fiesta in any one of the bars that are bound to be bursting with life.

Just north of the capital's main boulevard, Gran Vía, Madrid morphs into a completely new city in which rebellion, freedom and extravagance reign among the streets of Malasana and Chueca. Considering these neighbourhoods practically overlap, they manage to retain two very distinct flavours, making it especially delicious to meander between them and try a bit of each.

For me, Malasana's style is unequivocally Madrileno. After the death of Franco in 1975 the carving of Spain's new cultural identity became a crucial part of the country's social development. Malasana's gritty and convoluted maze of streets became the scene of this new wave, known as La Movida. Bars, cafes and clubs sprung up creating a hedonistic haven where people could enjoy their newfound freedom. Madrid's underground scene was born here and continues to be nurtured today, making it an ever-changing melting pot of originality. It is easy to experience a full spectrum of musical genres all on one street as the sounds of rock, funk, electro, hip-hop, acid jazz and disco punk blast out of bars and clubs. For something more laid back, grab a table in Plaza Dos de Mayo, the true soul of the neighbourhood, where I could happily people watch all day long.

As you explore Malasana you cannot help but stumble upon quirky finds, from bookshop- come-galleries like Panta Rhei, to Pinta en Copas, the ceramic shop where you can wile away an afternoon painting the crockery of your choice. This is also Madrid's most alternative shopping district - chains like Mango exist alongside vintage shops and funky market stalls. Mercado Fuencarral is a top spot for bagging a bargain, whilst unique shops like Ioli allow you to design your own pair of shoes (at a price, of course).

A quick jump across Calle Hortaleza and the prominence of rainbow flags pinned up in windows tell you you're in Chueca, Madrid's gay district. Despite the significance of being gay and proud, Chueca is by no means exclusive, but rather welcomes anyone with an open mind. Located just a stone's throw from rocker's Malasana, Chueca moves to a different rhythm altogether, oozing confidence and attracting some of the city's chicest residents.

This is a treasure trove for shopping if you're partial to splashing the cash in cutting edge boutiques, as the area has become a renowned start-up spot for young designers. In addition to clothes Chueca boasts some of the most elaborate furniture, chocolate and sex shops in the city. So even if you can't afford to splurge, an afternoon of window-shopping will certainly make for a memorable experience.

Gastronomically Chueca is also one of Madrid's most diverse spots and many of the restaurants showcase fusion cuisine in designer settings. Jhambala makes for a chic choice for dinner or chilled place for shisha and afternoon tea, while Indochina is a favourite for romantic nights out. To really experience the workings of this fantastic neighbourhood, have a drink in the Plaza de Chueca before trying one of the notorious clubs which surround it.

Dipping just south of the city centre you will stumble across Madrid's most eclectic neighbourhood, Lavapies. Whilst the maze of steep streets which predominate this area are lined with traditional Spanish buildings, the majority of the inhabitants are not, and never have been, traditionally Spanish. In Medieval times Lavapies was Madrid's Jewish and Moorish quarter and today it continues to thrive as the most racially diverse part of the city. Indian, Arabic, Chinese, African and Gypsy communities live side by side, the corner shops are stocked with exotic spices and the smell of curry abounds.

The result of this cultural montage is a pumping social centre where everyone is welcome and anything goes. The laid back ambience also attracts a boho crowd of young, creative minds, resulting in the sprouting up of numerous artistic treasures tucked away amongst the mish-mash of narrow streets. Keep your eyes peeled for special little art galleries like Helga de Alvear, eclectic bookshops like the Librería Oriental and quirky El Horno dance studio, where you can take a class in anything from Afro-Brazilian to Oriental dance, taught by the pros who reside in the area.

If you would rather watch than participate, catch a live show at Sala Juglar where nightly gigs in a huge range of genres (literally it could be anything - folk one night, hip hop the next) kick off around 9.30pm. Nearby Candela is a renowned old-timer for some heartfelt gypsy flamenco wailing.

The four main streets surrounding Lavapies metro are also perfect for cheap, tasty eats and numerous affordable bars which bustle with life between 9pm and 3am. Be transported from continent to continent as you grab dinner in one of the area's numerous curry houses or at Melo's, a popular no-frills haunt offering six Spanish staples made to perfection. Then hop into an Arabian teahouse for an authentic belly-dancing extravaganza. To truly enjoy Lavapies you should leave behind any preconceptions of "embracing pure Spanish culture" and go with the flow. Modern Madrid is like a work in progress in the midst of "multiculturalisation" and Lavapies is the perfect place to experience it first hand.

There is something about these diverse and exciting corners of the Spanish capital that leave you wanting more. The city's compactness means that in a matter of moments you can pass through old, new and evolving Madrid, watching the organic development of the city as you go. There is a very strong sense of authenticity and integrity within these streets, they may not all be grand and jaw-droppingly impressive, but their secrets and the people who inhabit them welcome you in, take care of you and offer you endless surprises if you just take the time to get to know them.

- NINA DERHAM.