At the Blue Lagoon, facepacks are all the rage. Queues form around the tubs of the silica mud as men and women, boys and girls wait their turn to scoop up the gritty white goo and slather it at will. After 10 minutes, the mud works its magic and faces are rinsed clean to reveal the exfoliated flesh beneath.

There are some who think the famous geothermal spa, a 40-minute drive from Reykjavík, is best enjoyed in winter when it’s cold, dark and foggy and you can sink into the cosy water believing you’re the sole inhabitant of the earth. But on a clear sunny day, the ethereal tableau that is Iceland’s No.1 tourist attraction lies before you in all its cleansing glory: the water’s distinct milky turquoise colour created from blue-green algae mixed with the aforementioned white sludge; the bodies in swimwear parading past lifeguards wrapped in fleeces (even in the May sun you still need plenty of layers here); and the rising steam that shrouds a moonscape of volcanic rock.

Strangest of all is the great fuming power station in the background that publicity shots of the spa do well to avoid. Svartsengi plant looks as unattractive as your average multi-chimneyed industrial works, to the extent that The Guardian accidentally featured it in a picture spread of the planet’s most polluted places. They have since apologised profusely – the plant creates geothermal power, one of the cleanest sources of power there is. Renewable and sustainable energy is harnessed from geothermal seawater a mile beneath the ground, to provide the country’s hot water, heating and electricity.

Although the lagoon might look at home among the lava fields that surround Reykjavík, it is in fact man-made, formed from effluent flowing from the plant back into the ground. The sediment in the mineral-rich liquid plugged the porous rock, creating a pool of industrial waste that now attracts 315,000 paddlers a year, a number greater than the entire population of Iceland (currently 293,291).

While technically correct, calling it waste gives the wrong impression. The water of the Blue Lagoon, with its rejuvenating cocktail of salts, algae and silica, is no extraneous overspill. A dip in the thermal spa is recommended by Iceland’s health service for skin complaints such as eczema and psoriasis (there’s a clinic for the latter on site). A girl in our party found the water cured her dermatitis and someone has since told me it got rid of their warts, a detail missing from the Blue Lagoon brochure.

For those without specific complaints, being soothed by the 40?C pool, pummelled by the waterfall and steamed in a lava cave will leave you scrubbed clean and glowing.

It’s the perfect way to arrive in Reykjavík, a city that oozes cleanliness. Iceland’s capital, the most northerly in the world, has been lumbered with various sales-pitch titles, including ‘the new London’. Comparing Reykjavík to London, travel writer Tim Moore has said, is like comparing Lego to sex. You can see where he’s coming from. Practical houses painted in impractical colours (unless you count being able to spot your house from the air as practical – oh, there’s mine, the one with the blue roof”) lie in neat rows from the centre to the suburbs.

Apart from a lone kebab van, the only building that stands out is Hallgrimskirkja, a towering church. Far from cluttering up the skyline, its crisp edges, constructed to look like a mountain of lava, provide a link between architecture and aeronautics. Take the lift or climb to the top of its tower and you’ll see the Legoland of Reykjavík for yourself.

Inside, the city’s buildings are far less uniform with thrift stores and designer boutiques neighbouring the sleek cafés and bars you hear so much about. But no matter how much you spend, drink or smoke it’s difficult to feel dirty in Reykjavík, perhaps the reason the Icelandic Phallological Museum has taken its collection of penises elsewhere.

Emerging from Damon Albarn’s Kaffibarinn to be whipped sober by a fresh breeze and a blast of 2am sunlight, you can’t miss the irony of the city’s name. Reykjavík means smoky city, after the steam rising from its nearby geothermal features. But thanks to the Svartsengi plant, the air couldn’t feel fresher. A brisk stroll through the streets of Reykjavík and your lungs will feel as clean as your newly exfoliated face.

• Amy Adams travelled to Reykjavík with Icelandair (0870-787 402; Flights from London Heathrow to Reykjavík start at £99 one way.”