LIKE almost everyone in this corner of Scandinavia, the group of students at the bar looked impossibly wholesome.

Tall, blond, and ludicrously good-looking, they oozed good health and charm. Yet, appearances can be deceptive. Especially in a dimly-lit underground pub at two o-clock in the morning.

“This is a city that loves to have fun,” says a guy with a wide smile and teeth like ivory, while handing out bottles of strong Danish ale to his friends.

“We take it very seriously – that’s why we are all here. And that’s why we will all stay.”

And, even after just a few hours in Aarhus, I can tell he’s right.

Denmark’s second city is one of those rare places which are big enough to buzz with life, but small enough to allow you to wander around lazily on foot. Or, if you’re a Dane, on a bike.

A university city, this port on the sandy east coast of Jutland, has the feel of a nordic Oxford. Bicycle bells tinkle constantly as students and tutors dart between lectures, book shops and bars, or hang out in cafes, drinking coffee while pouring over glossy design magazines.

Design is big in Aarhus. Old factories and workshops house minimalist coffee shops, funky restaurants are tucked away down medieval courtyards, and narrow streets are lined with shops selling the kind of beautiful objects you’d expect from the homeland of Arne Jacobsen and Ole Kirk Christiansen, the inventor of Lego.

But if design is big, architecture is bigger. indeed, everyone you meet seems to be an architect. And they have left their stamp on the city, with some fabulous buildings.

And it’s nothing new. They have been throwing up impressive edifices in Aarhus since the days of the Vikings, who founded the place.

For a unique taste of the best of Jutland, head to The Old Town (‘Den Gamle By’ in Danish) – a series of reconstructions of bygone Aarhus from the 1800s, 1920s and 1970s.

With complete streets of period buildings moved from across the city, it’s an engaging yet surreal place.

The feeling of having stepped into a series of time warps is only increased by actors in period costume who, depending on the period, turn out crafts in spit and sawdust workshops, sell old-fashioned tin toys, or, most interestingly, show off the latest in cutting-edge 1970s technology at shops stuffed full of chunky cameras, portable record players and what must be the biggest collection of cheesy Scandinavian vinyl between here and the Arctic Ocean. Nostalgic and stylish, it’s a retro-lover’s fantasy, and very hard to leave.

For truly startling architecture, though, head back into the real world and set a course for the building which dominates the city’s skyline. The ARoS art museum is not just one of northern Europe’s biggest and best galleries, it’s also one of its strangest buildings.

Essentially it’s a vast brick cube crowned by a multicoloured glass ring, known locally as the rainbow, which offers 360-degree views, in surreal acid tints, of church spires, steeply-pitched roofs, industrial chimneys and dockyard cranes.

The views in the galleries are equally eye-popping, with cutting-edge walk-through installations designed to warp your senses. The succession of flashing lights, jets of steam, mirrored labyrinths and thought-provoking sculpture make it feel less like an art gallery than a grown-up house of fun.

And the same could be said for the rest of the city.

But, as those well-polished locals never tire of saying, fun is important business. And never more so than at the annual Aarhus Festival.

An urban multi-venue celebration of music, theatre and art, it is a cross between the Edinburgh fringe, the Proms and Glastonbury.

And if the city is lively for the rest of the year, for this 10-day blow-out at the end of August and start of September, it positively explodes.

Where else could you, in the same day, rub shoulders with the Crown Prince and Princess of Denmark at a royal command performance in the city’s concert hall, dance to DJs in the street, gawp at acrobats, magicians and cabaret performers in a circus big-top, and sing along to top Danish and international artists in clubs, bars and theatres?

As a measure of the calibre of acts it attracts, last year’s bill featured Josh T Pearson, Gemma Hayes, Mark Lanegan, Howe Gelb and virtuoso violinist Sarah Chang. “It is really eclectic,” the event’s organiser Line Gerstrand tells me at the festival’s buzzing office.

“There is music, comedy, theatre, literature, food and science. We even have special events for children. And it does take over the whole city.”

While tickets for the big shows are at a premium, some of the best fun can be had for free.

Aarhus is a city of squares and plazas and each one houses its own party, catering for a different audience and all going on well into the night. One historic square hosts a marquee of laughing cowboy hat-sporting beer-drinkers singing along to live Europop, another has up-and-coming indie-rock, while a park is turned into an urban beach – complete with sand, deckchairs, bar and bands playing jazz and country.

The most startling though is the transformation of the square outside the city’s grand old theatre – which is turned into a pop-up artistic village called Rebeltown, complete with graffiti wall, cyber-punk art and a whopping great dance tent rammed with grinning clubbers.

It’s the kind of thing which could only happen in Denmark. The beats – and the beer – keep coming until midnight, and the dancing is crazy.

But it is safe, fun and cool. There are no police or bouncers, but neither are there any drunks, scuffles or queues. Just lots of shiny, happy people having fun. Serious fun!