The Golden Palace is the last of its kind in Hong Kong. A licensed ballroom as opposed to a nightclub, it is a 715-square-metre dance hall, considered 'medium-sized' by its owners. The decorations remain unchanged from the day it opened in 1979: fairy lights surround the large dance floor, over which hangs a glitter ball, grime coats the once-red carpet as it recedes into the murky depths of the club where customers sit and talk with hostesses between visits to the dance floor. Someone, some time, forgot to take down the golden banner over the stage reading 'Merry Christmas and Happy New Year'. Songs, mainly crackly Chinese recordings, play over a sound system until mid-evening when a group of musicians slouch in chairs on stage and run through a rhumba/cha-cha/tango/waltz repertoire as a sequinned singer does her very best. The dance floor is never empty ... apart from those brief, jarring moments that remind the visitor of the club's real purpose.

At regular intervals, and usually in the middle of a number, the music is drowned out by a hideous, electronic jingle: a cross between a tacky door-bell tune and telephone hold music. Above the dance floor, an orange flashing light like the ones seen on emergency vehicles and tow-trucks, goes blindingly off. The dance floor clears and couples head back to tables where the siu-jeh, or hostess, signs a little coupon that will be worth $10 to her once the customer leaves. If he's still hot to foxtrot, they return to the floor until the next jarring interlude when she casually signs another chit.

Back in the office, shelves are lined with piles of these coupons. Each has a name above it. When they're not written in Chinese, they subscribe to the Fanny, Connie, Winnie, Jenny and, yes, Honey, school of appellation. When a girl lands a customer, her coupons are taken out to her and she works her way through them, landing a percentage of the total bill once the customer has gone on his way. And, of course, a tip.

'Ah ha,' you may say. 'It's a nightclub. How original.' Well, you'd be wrong. Perhaps that's why the owners of the Golden Palace finally consented to an interview and grudgingly allowed a photographer into their club.

'Business is average - it's not that easy to make money,' sighs 'Manager Liu', one of the six owners of the Golden Palace. Liu is an accountant and he acts the part right down to the last non-committal quote. 'It's not like a nightclub. There, they go in and spend their money and go out. Here, they might come for three or four hours. There is no minimum charge and it's only $10 for a coupon.

'Business is so-so. We might close in 1997. Put it this way: two years ago we might get 100 people at peak period, but now we get 70 to 80. A lot of people like to go to China. What do they do there? Look for girls of course. The money they spend here in a day could cover several days in China.' A large percentage of the Golden Palace's customers look as if they come from China. The rest look as if they have stepped out of a 1950s Hong Kong movie: the dance-floor lights gleam off brylcreemed hair and the parquet echoes to the pitter-patter of white, patent leather footsteps. But, to a man, they dance wonderfully well. A couple of septuagenarians in particular catch the eye: one, whose partner must be at least 30 years his junior, looks as if he has twirled off a movie set.

'He's nearly 70,' confides Ling-sai, a wonderfully-skilled dancer herself who hails from Guangzhou and lends an extraordinary flourish to every dance, no matter what the song or who her partner may be. 'I love to dance with him because he can teach me so much.' Hold on a minute. Isn't all this love of the dance a bit over done? Surely, it's all about 'PR' - Hong Kong's oldest profession. After all, who really knows how to dance properly in Hong Kong any more? Certainly not the Canto-pop generation. The occasional younger visitor to the Golden Palace tends to sit and chat, or play those infuriating drinking games.

And what of the other ballrooms? After our first visit to the Golden Palace, we seek out other clubs known to lovers of retro Hong Kong and cherished by movie-makers as great locations for Hong Kong nostalgia films - the hot genre of the moment. Portland Street draws a blank, so it's off to Jordan, home of the ballroom. Er, sorry. Scrub that legend. Time after time, we trudge up staircases, drawn-in by signboards featuring dance-step illustrations, only to find the premises newly kitted-out in chrome where hard-eyed doormen take one look and wave us away. Closer inspection of those signboards downstairs reveals the sinister explanation in the shape of the dreaded microphone, that hideous symbol of karaoke colonisation. The death knell has been sounded for the ballroom and it has been sounded with reverb.

'This is the only club of its kind left,' says Manager Liu, who goes on to list a half-dozen that have closed. 'But they have closed because business is slow. They don't close because there aren't people who want to dance. They simply don't work out in a business sense.

'You know, people really do come here to dance. It can't be for the girls. It's dancing - and that applies to both young and old. Let's face it. If they really want a girl, and that's all, they'll go somewhere else.' The word 'girls', to be honest, doesn't do accurate descriptive justice to the employees of the Golden Palace. The average age of the hostesses, who work in teams of 10 under 'group leaders' (mama-sans), would appear to be closer to 40 than 30, and some wonderfully distinguished hostesses look as if they're tangoing merrily towards 50. What they have in common is their ability to dance. They cannot work there if they are unable to hold their own on the floor with a twinkle-toed customer. Thus, the young girl in the Mongkok uniform of tight black-and-white sportswear and clunky boots waltzes with as much finesse as the dignified dame in the black gown and hairspray.

'It's hard to make money working here - maybe just a few thousand a month,' Liu says. 'They only do this for the dancing money, but they like to dance and they like to make their money by dancing.' The 'girls' back him up on that one. Steering neatly clear of words like 'sleaze', thirty-something Dik-ka says as long as you don't set your sights too high, it's a fine way of earning a living. 'What I like about this kind of work is that it is more polite, more genteel. The customers come to chat and dance and that is nice. They stay for two or three hours and everyone has fun.' She, of course, is drawing a comparison with other forms of hostess work. Ling-sai, the dance-floor dynamo from Guangzhou, extends the comparison. 'When I first came to Hong Kong I used to work as a 'PR' [her nose wrinkles in distaste] in a bar, but friends from Guangzhou who knew I could dance suggested I work at the Golden Palace.' And so she does. With pleasure. Kitted out in togs worthy of a ballroom dancing contest and ever keen to thrust a leg skywards, Ling-sai gleefully poses for our camera, chatters excitedly about the rhumba (which comes out 'lumbar'), and insists we go dancing with her one night.

The diary is beginning to look busy. First, there's Uncle Chan, who says he goes to the Golden Palace four or five times a week, usually around 6 pm. Then there's Ling-sai. And, finally, the mama-san - 15 years at the club - who promises to teach us a few steps. 'I don't know about the management,' she says. 'But I think this place has a great future, because it's a polite place - gentle and happy and a good place to communicate.' Through the universal language of dance, of course. In our three trips to the club, things only threaten to get unpleasant on one occasion. Our photographer is confronted by a customer who, having posed happily for pictures, appears to have had a change of mind and demands to be told where the pictures will appear. The floor managers move in, angrily escorting the photographer away from the customers and suggesting we leave. Don't worry, we tell the angry punter. We won't show your face anywhere.

Promise.

His face softens, he smiles, and with a wink he says: 'It's just that I wouldn't want the wife to know, you understand. Promise you won't show my face? Thanks. Enjoy the dancing.'