A small crowd has formed at the top of the lighthouse in Byron Bay, mainland Australia's most easterly point, staring intently at the expanse of blue beyond.

"There!" someone shouts, pointing excitedly, as the humpback whale launches itself out of the water and comes crashing down. The crowd coos its appreciation of the mammal's majestic breach while, closer to shore, surfers catch curling waves and people walk, jog, play or just lay on the vast stretch of sand below.

The area was known as Cavvanbah ("meeting place") to its original inhabitants, but James Cook sailed past in 1770 and renamed the headland in northern New South Wales after renowned navigator John Byron. Cedar-cutters and farmers settled here in the 1880s, followed by whalers in the 1950s (for a thankfully brief eight years) and surfers in the 60s, lured by the perfect breaks at The Pass. Hippies arrived in the 70s, setting up camp in the hinterland (most famously in Nimbin, which hosts an annual Mardi Grass festival calling for the legalisation of cannabis) and creating an alternative vibe that can still be keenly felt.

In the mid-80s, filmmakers and writers moved in. The were led by Crocodile Dundee himself, actor Paul Hogan, and followed by cashed-up "sea-changers" looking for an alternative to city life. Since then, the laid-back town, and the glorious countryside that surrounds it, has become one of Australia's most exclusive property enclaves and a holiday mecca for everyone from backpackers to A-list celebs, such as model Elle Macpherson and entrepreneur Richard Branson.

That's not to say Byron doesn't have its detractors; those who think it's become too popular - the town of 9,000 inhabitants attracts about 1.7 million visitors a year - and perhaps a touch too pretentious. The same, though, cannot be said for its surroundings.

Rolling hills more reminiscent of England's green patchwork than sunbaked Oz and lush valleys planted with neat rows of macadamia trees give way to World Heritage-listed subtropical rainforest. The landscape is dominated by mighty Mount Warning, known as Wollumbin ("cloud-catcher") to the Bundjalung people, remnants of an ancient volcano that are touched first by the dawn sun. This vast caldera, called the Green Cauldron, stretches north from Byron Bay to the Gold Coast and west towards the Great Dividing Range.

A meandering web of country roads connects curiously named towns such as Goonengerry, Coorabell and Myocum. A welcoming sign proclaims Mullumbimby, in the shadow of Mount Chincogan, to be "The biggest little town in Australia".

Mullum, as the syllable-averse locals inevitably call it, is delightful, with wide palm-lined streets, a verandah-clad pub and a handful of eclectic boutiques and galleries. Reminders of the area's new-age bent abound, from the rainbow banners flying above the community vegetable gardens (organic, of course) to the dreadlocked bohemians strumming guitars at the weekly farmers' market.

It feels like the entire town has turned out for the Friday morning market, held in the shade of magnificent fig trees at the showgrounds. Locals catch up over coffee while traders encourage passers-by to sample their wares. We stop for a super healthy sugar cane smoothie - the purple stalks are fed through a juicer and mixed with lime, mint, parsley, kale and ginger - and stock up on pecans grown by Aborigines.

Just outside town is Crystal Castle, a centre devoted to crystals and New Age philosophies set amid landscaped gardens filled with Buddhist and Hindu statues. You can have your chakras aligned or your tarot cards read but we're more inclined towards the Lotus Café, overlooking the grounds; the broad bean and roasted beetroot salad with baked ricotta and kale pesto proves to be a spiritual experience in itself.

Silencing our inner cynic, we sign up for an aura reading. After placing each hand on a sensor, a staff member takes my photograph and hands me a Polaroid that purportedly shows the "energy field" around my body. The blue haze above me signals sensitivity and intuition while my husband's red and gold aura is so strong he can't be seen.

"I haven't seen an aura like that in a long time," says the energy-diviner, sagely. As she explains that gold indicates "higher wisdom" and red means he must remember to look after himself, he shoots me a triumphant look.

Makeshift stalls displaying organic produce, to which you can help yourself and leave money for in an honesty box, line the picturesque roads. Although Wollumbin has been inactive for more than 20 million years, its fertile soil provides a bounty of bananas, avocados and, more surprisingly, coffee.

While most coffee is grown in the tropics at an altitude of more than 1,000 metres, plantations in the Byron hinterland tend be located 100 metres to 200 metres above sea level.

"Everyone said we couldn't grow coffee at low altitude but we knew they did 100 years ago," says John Zentveld, of Zentveld's coffee plantation, near Newrybar, about 20 minutes' drive from Byron Bay. Zentveld planted 12 hectares in 1988. "The subtropical climate means our beans take longer to ripen, so they are naturally lower in caffeine."

Zentveld set up a roasting business in 1993 and his rich blends are found in many cafes and restaurants around the region. We sample a cup in Bangalow, 5km north of Newrybar.

The upmarket village is the prettiest we've stumbled upon so far, its main street lined with 19th-century buildings, chic boutiques and restaurants. Nevertheless, it has a sleepy, country-town feel, with a Country Women's Association store selling lace doilies and knitted blankets and Akubra-wearing farmers sinking schooners at the bar of the art deco Bangalow Hotel.

On a tip-off from one of the pub regulars, we pass through the charming hamlet of Federal, with its quaint general store and community hall, and turn onto a dirt track to Minyon Falls, in the Nightcap National Park.

Water cascades over rugged cliffs, thick with eucalypt and gum trees, to the deep gorge below, a reminder of the area's volcanic past. From the lookout, it is possible to see all the way to the coast, but the bustle of Byron feels a world away.

 

Getting there: Byron Bay is a two-hour drive from Brisbane, to where both Cathay Pacific and Qantas operate daily flights from Hong Kong. Coaches are plentiful but a hire car would be more practical if you were interested in exploring Byron's hinterland.