Submarine dream.

Design of the interior of a new hotel on a remote island in the North Sea draws on the floating drifting forms of marine flora and fauna.

The two islands of Heligoland, lying 70km from the mouth of the Elbe, are a three hour hydroplane ride from Hamburg. For such minute, isolated specks of flat red rock (the main one is one mile long, at most one-third of a mile wide) they have had an extremely interesting history.

Supporting a spa and a fishing community, Heligoland was passed during the nineteenth century from Denmark to Britain which gave it to Germany (in exchange for Zanzibar). As a German possession during both world wars, it was an important naval base and munitions dump. In 1947, the British succeeded in obliterating fortifications, munitions and town, and used the island for bombing practice until 1952, when it was handed back to the Germans.

As a result of a competition held in the 1950s, a new utopian town, faceless and utilitarian, was built to replace the one destroyed. It is now designated a national monument. A new arrival, the Atoll hotel is externally an undistinguished building cranked round two sides of the main square in front of the Rathaus. On the other side, the two faces pinned at the angle by a glass tower, look south and east over the sea. Designed by NPS Architecten Hamburg and put up by Arne Weber, a Hamburg industrialist, its architecture is due to the strictures imposed by the islands' planning authority.

There is little about the circumstances -- the sea-girt remoteness, the strange little town fixed in a time warp, the undistinguished exterior of the Atoll -- that prepares you for the hotel's extraordinary and dreamlike interior, designed by Alison Brooks Architects. The only intimations are the two-storey glass teardrop, which projects from the south-west corner of the building and contains a bistro, and the curving metal clad exterior of the Atoll shop to the west of it.

Alison Brooks was once a partner of Ron Arad's, working with him, among other things, on the design of subterranean restaurant Belgo (AR July 1995) and the Tel Aviv opera house foyer (AR December 1993). Like Arad, she is an inventive designer working at the edges of surreality. Her interiors are inhabited, animated rather than furnished, by organic forms like characters suggesting growth and movement; disliking the orthogonal, she dissolves boundaries so that walls and ceilings bulge and distort, are pierced or sprout bizarre protuberances. Like Arad, she is apt to hijack familiar materials into unfamiliar places.

Design (and her invention of the name) of the Atoll interior was inspired by Weber's North Sea relic of a man-made atoll, a floating ring structure once inhabited by deep sea divers and used as a base. (Presently being restored, he plans to convert it into a floating bar moored off Heligoland.) Brooks' imagination, charged with images of submarine depths, flora and fauna, has been translated into circular geometries, undulating forms, liquid spaces, strange materials and shimmering colours.

Restructuring of the building was required to obtain flowing space, but within the L-shaped plan, arrangement of the facilities is straightforward. The restaurant, offices, conference rooms and shops are on either side of the foyer, at the junction of the L. Above this are 32 hotel rooms on two floors, and below, a sybaritic health centre reflecting Weber's desire to restore Heligoland's status as a spa.

As in Belgo, details are so richly invented, so intriguing, that it takes time to absorb them. Moving from the foyer, where you look down stainless-steel cones to the swimmers in the pool below, to the shimmering copper-enclosed bar, to the bistro, furnished with undulating tables and a ship's ladder and flooded with soft northern light, you are continually distracted. Surfaces ebb and swell. Lavatories are a particular delight: men's have stainless-steel urinal trees rising out of illuminated glass puddles, women's are enclosed by a horseshoe jellyfish pierced by glowing slots.

The revolution in hotel design began with Ian Schrager and Philippe Starck, and later, Jean Nouvel (ARs August 1990, July 1993). Brooks takes it a step further. Her design of Atoll bedrooms avoids the domestic mockery of conventional hotel furniture. Instead, all room functions are concentrated in Shelf Life, a 7m long cantilevered wall unit. Of carbon fibre and built by a company specializing in composite structures for offshore oil rigs, the undulating black plane meanders down the wall, providing a hanging rail, luggage rack, desk, chaise longue and tv stand. There are no furniture legs or cables. The claustrophic bathroom cell has been replaced by an enclosure of translucent glass with cylindrical shower; and the usual grim bedside lamps by a glowing plane of light at the head of the bed.