In this age of incremental global-warming, most northern European capitals get nothing more spectacular than grey and drizzly conditions as autumn gives way to winter. Not so Stockholm, where electric-blue skies often accompany a fantastical cityscape enrobed in glittering snow. The city's homey Christmas markets provide the most tangible sign that the festive season is under way, and look even lovelier glowing beneath the snowflakes. Their stalls are laden with pepparkakor (gingerbread), Tomten (a Santa Claus-like figure) dolls, hand-dipped candles, bottles of glogg (mulled wine), and mountains of Christmas decorations. The glogg at Gamla Stan (Old Town)'s Christmas market, acknowledged as the most traditional seasonal market in the city, is typical. The heady burgundy-coloured brew, fortified with brandy and spiced with cinnamon, cloves and raisins, tastes as if it is inspired by a winter Bacchus. It's actually the work of Bergakungen, or the King of the Mountain, as my uncle calls himself. And so I find myself back in the town of my birth again, quaffing glogg with my unnervingly beautiful blonde, blue-eyed cousins, eyeing a timeless Christmas-card scene through the window and wondering why I don't come here every winter. Before I arrive at an answer, a couple of young ice-skaters whiz by outside, reminding me this city truly is a winter wonderland. Sweden's capital is built on a cluster of 14 islands at the point where Europe's largest lagoon meets the Baltic Sea. With so many frozen waterways around the Venice of the North, outdoor skaters form an integral part of the Yuletide picture. Moreover, skating opportunities become unlimited when the Baltic freezes, which happens from time to time. Young Stockholmers love to glide over the ice and, later in life, many progress to long-distance skiing, which takes thousands of absurdly fit adults out beyond the city's Socialist-style suburban new towns as soon as there's enough snow on the ground. It all happens here in December, including Stockholm's annual event of world-renown: the Nobel Prize ceremony. As luminaries from every corner of the world converge for the annual event, the city basks in global media interest and five-star hoteliers rub their hands with glee. This is perhaps nowhere more evident than at Scandinavia's most prestigious hotel, The Grand, which for a few days every year becomes a sudden informal Mensa club, partying famously and putting the world to rights. The ceremony is an invitation-only event but the celebratory mood spills out across the whole city. Days later, a wonderfully ethereal festival arrives to keep the holiday momentum going. Saint Lucia's Day is marked by city processions of young ladies wearing flowing white dresses and crowns of lit candles. Banks of choristers add a heavenly sonic dimension to this mid-winter celebration. The Lutheran Swedes adopted Sicily's Saint Lucia for this time of year because of her name, which has connotations of light, and that is essential for this far northern land where natural illumination is in short supply close to Christmas. Stockholm's holiday season is most palpable in Gamla Stan, which has the perfect architecture for fairy-tale images of Christmas in the far north. Rooftop snow resembles icing on gingerbread houses. Families file in and out of its two magnificent churches, one originally German, the other Finnish - reminders of Sweden's powerful Hanseatic League past. One of the finest and best-preserved of Europe's historic city centres, rivalling even those of Prague or Riga, most of Gamla Stan's baroque buildings date from the 17th or 18th centuries, and their autumnal colouration - copper beech, pumpkin orange-yellows, peachy pinks and russet reds - provide ever-changing visual treats as one wanders through the narrow cobbled streets and alleyways of this neighbourhood that time forgot. This effect is accentuated when a lookalike of King Gustav III appears, dressed in regal 18th-century finery. I last saw him chatting to a group of surprised Japanese visitors in the town square. Also known as Lars Rosenberg, this Gamla Stan resident (who has a day job in the Social Welfare Department) heads a historical society drawn to Stockholm's golden age of three centuries ago - a time when most of the Baltic region, including parts of Germany and Russia, came under Royal Swedish rule. The current monarch, Carl Gustav XVI, also has a Gamla Stan home - the splendid Kungliga Slottet (Royal Palace), whose myriad museums are open to the public. Today's Stockholm sees an annual Christmas-shopping crush as frenetic as anywhere in the world, despite the locals' famous stoicism. Many choose to get it all done under one roof, and there's only one place for this. The iconic NK department store is where the most serious shoppers and legions of foreign tourists head for their year-end splurge. This vast establishment enjoys a peerless global reputation for stylish Swedish products, such as clothes, inventive kitchen gizmos and glassware from Sm?land, where glass-making giants such as Orrefors and Kosta Boda are based.. Nordiska Kompaniet, the store's rarely used full name, may be 102 years old, but it is still one of the hippest retail emporia in Europe. Caffeine keeps Sweden's Christmas shoppers on the move. Ever since King Karl XII introduced coffee from Turkey in 1714 , the neighbourhood konditori (coffee-and-pastry shops) have provided refuelling stops for on-the-go Stockholmers as the season takes on a wearying urgency. For the record, Swedes are the world's leading per capita consumers of coffee and demand the highest-quality brews. Coffee breaks, which usually involve a sticky snack as well, are part of the national psyche. The konditori bakers' yuletide temptations are sinfully calorific, but somehow always seem just the thing for calming frazzled nerves. Back in Gamla Stan, I meet a cousin for some java and a swirly cinnamon creation at Stockholm's hip and cosy Chokladkoppen cafe. At her urging, I set off to the market to buy some glogg from the King of the Mountain. Myriad stars twinkle high above the impossibly tall church spires. A choir is in full voice with Joy To The World in Stortorget square. And the market aromas of childhood Christmases past - smoked reindeer meat, gingery pepperkakor and hot chocolate - lead me back to a sense of wistful regret. Why indeed haven't I spent more winters here?