It is the best of cities, it is the worst of cities. In this tale, the two cities in question are Edinburgh and Glasgow. Edinburgh, Scotland's capital, has full employment, rocketing house prices and has been dubbed "the new Dublin".

Glasgow, just 40 miles away, was once the second city of the empire but now teeters on bankruptcy as its population dwindles.

For years Edinburgh has been the dour and dull companion to Glasgow's brash industrialism. Scotland's capital was home to a middle-class community of lawyers and doctors.

But, for the past decade, Edinburgh has enjoyed a growth rate matched only by London, Frankfurt and Dublin. Employment is growing faster in Edinburgh than anywhere else in the UK, with unemployment expected to dip below 2 per cent this year.

The old Edinburgh stalwart of banking is attracting new firms from the continent and the United States, drawn by the city's status as the sixth largest fund management centre in Europe. The new industries such as software programming are growing faster there than in any other city.

The city's jewel is its well-preserved centre. Now the rundown periphery is being rebuilt at an amazing pace. Some £2 billion is being spent on building projects renovating the docks and eating up the last remaining waste land.

Where once the professional classes of Edinburgh seemed staid, bankers and lawyers now find themselves in the service professions that are in great demand. The city is splashing around in a pool of disposable income.

"Some people are talking of a golden age but I don't know if that is yet true," the leader of Edinburgh City Council, Mr Donald Anderson, reportedly said. But according to Mr David Alves, managing director of the Edinburgh estate agency Stewart and Saunders, the evidence seems convincing. "There's an awful lot of wealth in Edinburgh," he says.

House prices are rising at over 15 per cent per annum. Property is sold by closed bid. Where once the rule of thumb was to pay 10 per cent above the asking price, now flats and houses are going for twice their quoted value.

The tag of the "new Dublin" is not because of any of this economic success. It is down to the city's liberal licensing laws, where bars stay open into the night.

Initially, people credited the property boom to the creation of the new parliament. However, all the statistics show that it started long before political change became a reality. It seems more likely that Edinburgh enjoyed the combination of being a good place to live with a strong base in service industries at a time of relative economic stability in Europe. It made hay when the sun shone.