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Cayman Islands holiday: treasure islands

Superb beaches, dazzling marine life and a great choice of hotels and restaurants – there's more to Cayman than banking, says Maggie O'Sullivan.

Rum Point, Northside 8:00 AM BST 09 Oct 2011

In the beginning, there were three uninhabited islands in the western Caribbean. So small and flat were they that when Christopher Columbus came across them in 1503 he didn't trouble to go ashore. In 1670 Britain took control of the islands – by then known as Grand Cayman, Little Cayman and Cayman Brac – and settlers began to arrive, apparently undeterred by the caimans, mosquitos, and scarcity of drinking water.

So much for the history lesson. I've missed out the one thing most people know about the Cayman Islands: somewhere along the way they became a tax haven. Legend has it that King George III granted the islands tax-exemption status after locals rescued his son from a shipwreck – though it's more likely that they just didn't produce anything worth taxing.

The islands still import 90 per cent of their food and consumer goods, and their income comes mostly from tourism and financial services. All the same, the development of the biggest island, Grand Cayman, has been relatively recent. When I last visited in the Eighties, you stayed at the Holiday Inn or a dive lodge. Now there are dozens of resorts lining the gracefully arcing Seven Mile Beach (actually five and a half miles) on the island's west coast.

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