When I told my cab driver on the way to London Airport that I was going to Lithuania he had no idea where it was, but suggested, "It's somewhere on the Mediterranean, isn't it?". A Lithuanian tourist chief told me that at a professional conference in London, most of the executives she met were equally baffled.

Yet the centre of Europe is about 20km north of Vilnius, the country's capital, according to the French National Geographical Institute. Lithuania is also the largest of the three Baltic states and its area is larger than Belgium, Denmark, the Netherlands or Switzerland.

The country's population amounts to 3.7m; and there are some one million Lithuanians living abroad, the greatest number in the US. It was originally much larger than the present state and was also the last European country to become Christian. The famous Museum of Devils in Kaunas, although established by a 20th century artist, is a reminder of the pagan period. The Lithuanian language is related mainly to Latvian and has been spoken since time immemorial in the Country's heartlands. Nevertheless the official language in which key documents were written was an east Slav one known as Ruthenian.

The territory was extended even further when the ruler Jogaila married the Polish queen and became a Catholic in 1386. At its furthest extent the realm of Poland-Lithuania stretched from the Baltic to the Black Sea. It is regarded by the distinguished European historian, Norman Davies, as forming Europe's "prime haven of toleration" and its elective monarchy as a pioneering form of early democracy. Throughout nearly all its history Lithuania was more tolerant of Jews and other minorities than most of the neighbouring areas. The Pogroms which disfigured so much of Czarist Russia were hardly known in Lithuania. The capital Vilnius was - rather like Sarajevo before the recent troubles - a haven of toleration, in which Poles, Lithuanians, Russians and Jews lived side by side.

After the end of the 16th century, when the original dynasty died out, Polish influence began to predominate: and the gentry took up the Polish language and culture. Unfortunately the joint kingdom became a victim of Muscovy-Russia's expansion. After the third partition of Poland in 1795 Lithuania became part of Czarist Russia, which tried to eliminate the native culture - going at one stage in the late 19th century so far as to forbid the use of the Roman alphabet in which the language is written.

There were several distinct "nationalities" in the territory, including Russians, Lithuanians, Poles and Jews. The latter used Yiddish as their vernacular; but if they received a secondary education, usually went to Russian schools. Indeed, I still have a medal of my mother's, bearing the head of the Russian Queen Mother after whom her school was named.

Lithuania had its first modern period of independence between the two World Wars. Those Jews who remained in the country of course learned Lithuanian; and even had in the early years some reserved posts in the government. But those such as my father, who first studied medicine in Berlin, and then emigrated to Britain, did not in fact need to learn Lithuanian; and my parents spoke Russian when they did not want my brother or myself to understand.

My family relationship does help to explain why I was delighted to visit Vilnius on a weekend trip organised by Laima Paleckiene, the charming wife of the ambassador to the UK, followed by a couple of days of talks with the country's leaders.

All three Baltic states fell victim to the Molotov-Ribbentrop pact of 1939 and were annexed by the Soviet Union in 1940, an annexation never recognised by the West. In 1941, Lithuania had a Jewish community of 160,000. That year the Germans arrived, following Hitler's attack on the Soviet Union. Even before they got there some local Nazis blotted the country's record of toleration and made a good start in killing Jews, especially in the second city Kaunas, before the German Nazis finished the job.

When the Russians returned in 1944 at the end of the War many local citizens were exiled to Siberia on the pretext that they were unreliable bourgeois elements. Indeed, my own desire to see the Soviet Union as "objectively progressive" was undermined by my duty to take a regular food parcel to a London distribution centre for dispatch to Siberia. The recipient was eventually released and emigrated to Israel; and as far as I know, I have no relations still in Lithuania.

Of the 6,000 or so Jews now in Lithuania, only a handful are survivors of the Holocaust. Most have moved in from Russia and have only a rudimentary knowledge of Jewish culture. In the one remaining synagogue I visited in Vilnius on a Sabbath morning there were only a few dozen people. The Rabbi, Sholom Krinsky, who had come from New York, addressed his congregation in Russian, a language he had learned as the best method of making himself understood. The synagogue, which was built in 1906, was described as Mauritanian; and indeed the entrance arch and some of the interior design do exhibit a Moorish style. But it is completely unlike the popular picture of an old orthodox synagogue which ladies segregated behind an iron grid. On the contrary they display themselves in their weekend best at the front of open lady's gallery very much as I remember from my youth in northwest London.

My sympathy for Lithuania was aroused when, despite the glasnost of Gorbachev, the Soviet Union drew the line at allowing the Baltic republics to go their own way. Soviet troops killed 13 unarmed civilians outside the parliament building in January 1991. These 13 are now commemorated as martyrs in guidebooks and on monuments.

Lithuania's problems did not end with independence, granted by the Yeltsin regime in 1991. On the eastern border is Belarus, led by Alexander Lukashenko who still parades photographs of Lenin and Stalin. Much worse, he has recently appointed as deputy defence minister General Vladimir Usakhopchik, who is accused by the Lithuanian Prosecutor General the former Soviet commander who is of being a commander of the Soviet forces involved in the 1991 shootings. One lady said to me that although the Belorus border was only 30 kilometres away, in practice it was further than New York.

On the western border there is the Russian enclave of Kaliningrad, formerly Koìnigsberg in East Prussia. The Russians claimed they needed the area for defence purposes; but it is now only loosely controlled from Moscow and is regarded as a centre of drugs and Mafia capitalism. The Lithuanian deputy Foreign Minister, Vygaudas Usackas, fears it could become a ìblack holeì in the Baltic region.

Vilnius, which the Poles captured between the Wars, was restored to Lithuania by the Soviets. But it is still an international city and only acquired a Lithuanian majority in 1997. It still has Russia and Polish minorities of 17 or 18 per cent each and a Jewish minority of one per cent. The rest of the population is divided among "a hundred other nationalities". In any case when I came across people who knew no English, I had to fall back on the half dozen or so Russian words which I could drag up from the back of my mind.

One legacy of Russian - and perhaps German influence - is the emphasis on hierarchy. For instance the Vilnius opera has some very promising young singers, but they tend to go to America or western Europe where they are giving a chance in a leading role without waiting for the more senior members of their company to retire.

So long as one does not come with false expectations, Vilnius is well worth a visit. The Old Town is a major baroque city, which has been given a facelift. In contrast to other such places, such as Prague, it is not yet overrun by tourists and deserves to be seen before that happens.

It has always been a prominent intellectual centre. It was once known as the "Jerusalem of the North" and was celebrated in the 18th century for the presence of the "Vilna Gaon" who was supposed to have learned the whole of Talmud by heart at a tender age and was almost equally learned in secular subjects. The Great Synagogue - razed to the ground during World War Two - had room for 4,000 people, with standing room only on the High holidays. The city contained 96 synagogues before World War Two. The intellectual tradition continues, as I realised when I saw in a university shop an American book entitled New Developments in Probability Theory and Statistics, Volume 4.

Vilnius apart, Lithuania is fairly homogenous. Lithuanians make up some 82 per cent of residents. This gives it an advantage over its neighbours Latvia and Estonia where there are large Russian minorities.

Kaunas, the second city and interwar capital, suffers from comparative neglect. But this very fact makes it seem more like the home country from which so many Jews emigrated than Vilnius does. On the Sunday I was there some of the central streets were decorated with white streamers to celebrate a ecumenical conference in which Protestants and Jews participated. Nevertheless many of the building walls were still cracked, and as in post war western Europe, could have done with a lick of paint.

On the other side of the river is an area once known as Slobotke. This was where the Jews originally settled before they were allowed into the main part of Kaunas in the middle of the 19th century. The area contained the famous centre of Jewish learning, the Slobotke Yeshiva. Today, however, there is no trace of any such institution. Slobotke is approached by some remaining wooden houses of the kind familiar from the paintings of Chagall. On the eastern side there are the hideous metallic apartment buildings that one sees on the periphery of almost every former Soviet bloc city.

On the west there is a green hill at the top of which is the "ninth fort". This was established by the Czars but is now mainly known as the place where the Nazis took tens of thousands of Jews and others and shot them. Against the skyline is a modern style memorial of three jagged metallic pieces standing bare against the blue horizon. Whatever one's usual reactions to this type of sculpture, they are highly effective here.

From the motorway between the two cities we saw large expanses of attractive green land devoid of any sign of farming. Our guide said this was due to the dissolution of the collective farms and delay in establishing the legitimate private owners. But the politicians and economists had different explanations. Some focused on the poverty of the traditional Russian market and EU restrictions on agricultural exports. Others said that the agricultural population was still far too high and that restructuring was long overdue.

But I hope that I was not too sentimental in assuming that the natural bent of the active population was towards small and medium-sized firms. One example which impressed those of us with a sweet tooth was a lady in a suburb of Kaunas who specialised in producing a famous cake, rather like a very tall wedding cake but without icing. Indeed, she possessed a marketing genius as well and managed to secure the presence of television cameras while we were having a most enjoyable buffet lunch in her parlour.

Another lady who we saw in an artists village was regarded as a witch, but "a nice kind of witch". She has done some remarkable illustrations for Lithuanian editions of the Alice books, which some in our party thought could find a niche in English editions, despite competition from artists from Tenial onwards. But all such people and many others complained of a shortage of capital which slowed down the development of their activities.

Almost all the Lithuanian leaders I saw were very keen to get in to both Nato and the European Union. The president, Valdas Adamkus, was fully aware that Lithuanians could not hold out on their own against a surprise attack "if a mad Russian general seized control". But membership of Nato was valuable in establishing a western commitment to the defence of the country.

There was a good deal of dissatisfaction with EU negotiating tactics. One independent economist said that it was like negotiating with the Nomenklatura in Moscow. The long list of requirements for EU membership contains some ridiculous items; but reformist leaders thought that they were an essential spur to making the economy into a functioning marketing economy. I was reminded here of Italian leaders who used the need to qualify for the euro as their justification for reforming their budget and financial policy.

Lithuania is ranked by the World Bank as a "lower middle income" country; and people, especially the young, make great efforts to dress in western casual style. But the average wage is only $250 per month. The state minimum wage is $130. And I met a lady with an important executive job in the hotel industry whom earned $210 per month and who had to supplement her pay by acting as a tourist guide and an interpreter.

The conversion into dollars is made easy because, since 1994, the central bank has acted as a currency board and maintained a fixed rate of four littas to the dollar. The domestic currency issue has been more than 100 per cent covered by dollar holdings. The usual "transitional" price for such policies has been paid in an unemployment rate of at least 10 pc.

Because of the strength of the dollar Lithuania has become a very hard currency country. The rate of inflation last year was only a decimal fraction of a percentage. It may rise to two or three per cent this year, but only because of the blip in oil prices which has affected the rest of the world as well.

No surprisingly, there was much dissatisfaction with both the left of centre and right of centre politicians who have held office since independence. The proverbial taxi driver told me that they were all a lot of rogues who had lined their own pockets. One can of course find the same line of talk among drivers in London, Paris, Berlin and New York.

It is a sore point that while Poland has leapt ahead and now has a GDP per head about 30 per cent higher than in the last year of communist rule, Lithuanian output is still well below the Soviet level and is only now recovering from the impact of the 1998-99 Russian recession last year. The main explanation for the Lithuanian lag was simply that the Lithuanian reform effort started well after the Polish one. Possibly another bad legacy of Soviet rule is the habit of too many people of looking to governments for their salvation instead of to their own efforts.

Well over 70 per cent of Lithuanian industry is now privatised. Much has been sold to western concerns and some economists complain that too much investment has been concentrated on large and not very profitable enterprises.

The main economic legacy from the Soviet period is an enormously large energy sector. There is the Mazeikiu oil refinery, sold last autumn to the American pipeline firm, Williams, amid much controversy. In the north there are two large nuclear reactors at Ignalinia.. The Lithuanian government has agreed to close down the first of these as part of its efforts to become eligible for the EU, but it insists it needs financial support - not for economic adjustment, but for the physical costs of closure. There is still arguments about the second reactor, which although of the Chernobyl type has been much renovated and is said to have the clearance from several international agencies.

The Americans have come in for criticism for being too pro-active in defence of US corporate interests. Indeed, the US administration is supposed to be restive even at the thought of the switch from the dollar to the euro link which will be necessary before Lithuania can join the EU,. even if it does not adopt the single currency straight away. The IMF is also criticised, not because of its general economic philosophy but because it negotiators are said to come with a "one size fits all" formula which they will not discuss or adapt to local conditions.

On my last afternoon I had a shock. I had become accustomed to telling people that, whatever happened in World War Two, the majority of Lithuanian citizens - like their German counterparts - were not even born then. Indeed after decades of denial Lithuanian authorities now recognise in the words of the official guide book Facts and Figures that "some Lithuanians assisted the Nazis." But there were others who risked their lives to save Jews. The Yad Vashem Institute of Jerusalem has honoured 416 Lithuanians with the designation "Righteous Gentiles" for their role.

A presidential decree has established an International Commission to evaluate the crimes of the Nazi and Soviet occupation regimes. It is chaired by Emanuelis Zingeris, the Jewish chairman of the Parliamentary Committee on Human Rights; and it includes Martin Gilbert, the well known British historian.

It would be good to leave matters here. But the good impression was spoiled when I learned that a radical right politician, Vytautas Sustauskas, had become mayor of Kaunas on April 13 with the support of a left of centre populist group. The German Press agency has quoted him as saying "If the Jews Hadn't been shot, I would have to shine their shoes today." Sustauskas was earlier active in demonstrations against the annual black tie charity "Viennese ball" held in Kaunas and which had to be cancelled last year. But he is also reported by the Baltic Times to have said: "Haider is the choice of the Austrian people. The Jews of Europe are against him. We all know who rules the world." Such movements are profiting from disappointment that independence had not eliminated poverty and from a diffuse hostility to globalisation and foreign influence.

The new mayor has been ostracised by the main political leaders. President Adamkus has said: "By no means can we tolerate anti-semitism or hatred of other cultures," and added that he was convinced that their manifestation in Kaunas was a passing phenomenon. But the rector of Vilnius University, Rolandas Pavilionis, has officially met the new mayor and urged him to stand firm against efforts to diminish him.

What should one make of it all? Attempts to create scapegoats for all misfortunes of all those who are outside some self-defined group are not the monopoly of any country or nationality; and I risked offending the rabbi by saying that humanity was one of God's mistakes.

Meanwhile Lithuania's efforts to recover from her tragic history deserve more understanding that they usually do.