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Conversation turned to a local couple, who are desperate to leave Spain but who can't because their house is still unsold after four years on the market - despite dropping the asking price from 1 million to 750,000.

In 1992 the BBC spent millions of pounds launching an ill-fated soap opera, Eldorado, following the fortunes of British expats on the Costa del Sol. The project flopped and was cancelled a year later. Now, 20 years later, the real-life diaspora is experiencing an equally disastrous end to its Iberian dream.

Times are desperate in Spain. More than a million people took the streets earlier this month to protest at budget cuts, 24 per cent unemployment and the rising cost of living.

The price of milk and bread has risen by 48 per cent during the last year, according to a recent study, and of potatoes by 116 per cent.

Electricity bills are up 11 per cent while property prices are in free fall; they have declined for 15 consecutive quarters and are 41 per cent lower than in 2006.

Several of its banks are faltering: this weekend Spain's government is preparing to pump a further 19 billion into Bankia, the country's fourth-largest lender, in the biggest single bank bailout in the country's history. Trading in the bank's shares was suspended on Friday until negotiations over the rescue were complete.

Santander, Europe's largest bank, was among 11 Spanish financial institutions to be downgraded by the credit rating agency Standard and Poor earlier this month; and there's no sign of anything like economic recovery on the horizon.

Expats are finding life hard in a country where they once basked in a cheaper way of life. Around one million Britons spend part or all of the year in Spain, but thousands are now returning home and more want to, but say they can't afford to because their property is no longer worth what they paid for it.

For the first time since 1998, Spain recorded a drop in foreign residents last year, according to newly released figures.

With its narrow cobbled streets, whitewashed houses and children riding horses down the main road, Frigiliana lives up to most tourists' idea of an authentic Spanish village.

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Spain financial crisis: Sun setting on expats' Costa dreams