Holy order.

The Portuguese custom of turning ancient monuments into state-run hotels- pousadas - has produced notable successes. A recent scheme near Braga has been carried out with exemplary sensitivity.

In Portugal, state-sponsored schemes to revitalize the country's most romantic monuments, some abandoned and ruined, some just too large for private habitation, have been very successful. The most recent of these for state-run hotels have incorporated the ruins of ancient monasteries. The creation by Eduardo Souto de Moura of a hotel out of the ruined monastery of Santa Maria do Bouro near Braga in the mountainous north-west province of Minho must serve as the exemplar. Souto de Moura was an inspired appointment; his appreciation of the intrinsic nature of materials and of the character of place is almost mystical. This is evident most recently in his design of a stone house in Moledo that, facing the sea, streams long and low across a rocky hill above the town of Caminha. Unmistakably a modern insertion into the landscape, it yet is an organic element of it, with the structure and grain of traditional stone embankments. Here and at Santa Maria do Bouro, rigour and intelligence ensure that the picturesque is the consequence not the aim of design.

Minho is comparatively rainy and Santa Maria do Bouro on the top of a small hill rises out of lushly planted terraces; all around are the forest covered slopes of granitic mountains. As a ruin it was picturesque. The complex surmounted by delicate spires and guarded by massive walls consisted of the monastery church, some parts of which survive from the twelfth century, and a continuous building set on a great stone platform constructed between the sixteenth and eighteenth centuries. This turned like one arm of a Greek key around two courtyards - one the monastery cloisters enclosed on the north by the church wall, the other rectangular and open on the south.

Confronted by a shell, the architects could simply have capitalized on the picturesque making a 'ruin for contemplation' and building a new hotel beside it. Instead they spent six years creating a phoenix from the ashes of the old. Without seeking to recapture an imaginary original state, they simplified the plan by judicious demolition and, using stone so reclaimed, extrapolated from existing parts of the fabric to rebuild the plain stone facades, punctuating them with regular patterns of simple openings. The site slopes clown from north to south, east to west, so while the roofline remains constant, the height of the building set on a massive plinth varies. On the south side, a long terrace on the roof of the plinth now stretches the width of the building and looks down to a circular stone swimming pool.

Internally, monastic austerity prevails and is sharpened by new materials (glass, rusted steel, titanium and copper) used in various ways for ceilings, doors, panelling and balustrading. Detailing and outside doors have been designed around the metal angle section habitually used by the practice. There is a repertoire of passage aisles and corridors, an austere bridge, flights of stairs - that ensures fluid circulation. To original stone flights have been added monolithic blocks, steps of individual stone slabs and a slender flight of wood and steel service stairs connecting three levels of bedrooms.

The mystical opposition of water and stone is a recurring theme: present in the severely unadorned new pool at the eastern end of the terrace, and in marble and stone bathrooms. Bedrooms looking over the landscape possess the simplicity (almost) of a monk's cell: plain walls and wooden floor, a plain wooden headboard and white linen. Services have been so discreetly managed as to be imperceptible - heating for example is under stone floors.

Souto de Moura is a very material architect with evident affinities with the group of minimal artists represented by Donald Judd. Just as Judd and others do, he expresses the quintessence of a material, allowing it to speak without interruption. At Santa Maria do Bouro you are made aware of the mass, grain, weight and texture of stone, the insubstantiality of a glass door held within a fine metal frame, and in turn set within the mass of a grave, unadorned stone wall. You can at a glance read the nature of each element, for it is made eloquent by the manner of their juxtaposition. The perception is capable of enlargement: a cloister wall intact but detached from the main building to form a free-standing screen touches the heart by the grace and simplicity of the architecture.

Of all things the insertion of a luxurious hotel with everything that implies into an ancient monument is likely to destroy the qualities that made the structure attractive in the first place. Souto de Moura's extrapolation from the old is so very delicately executed, the new is expressed with such refinement, that the enormous dignity of the place has taken on new life while the various juxtapositions of old and new, the clearly expressed seams, are a constant source of delight.