The Hotel Mundial in Lisbon is famous for a number of features, most notably the breathtaking scene from the terrace of its traditional restaurant, Varanda de Lisboa. From here, you have a unique view of the magnificent St. George’s Castle which commands the top of the capital’s highest hill. Ahead of you, over the colourful, grand buildings of Rossio Square, the panoramic sweep of the distant Tejo River carries your eye in the direction of its outward flow towards the ocean. It’s a useful reminder that, as Chile is to Argentina, so Portugal is to Spain, facing west towards the ocean, in this instance the Atlantic, which brings its influence to bear on Portugal’s wine regions.

Less well-known than this view, but perhaps of greater importance to wine lovers is the Varanda de Lisboa’s wine list. My eye re-focuses on a remarkable section of the wine list headed ‘museum wines’. Here is a 1933 Colares costing a comparatively modest 106 euros and another section with six older vintages of Barca Velha, a red wine that has been heralded as Portugal’s greatest red wine. My companions and I risk the antique Colares. Youthful in colour, heady with mature aromas and rich in flavour, it is a revelation. If there’s anywhere else in the world with a wine list containing such venerable treasures at comparatively modest prices, I have yet to discover it.

The significance of this find should not be underestimated. For long Portugal has been associated in the British mind and wine glass with the fortified wines of Port and Madeira. Britain’s history and culture are integrally linked to the two traditional fortified wine styles. This is underlined by the fact that many of the great names of the Port shippers in Oporto north of Lisbon and on the sub-tropical island of Madeira are British: Taylor, Graham, Cockburn, Warre, Sandeman, Smith Woodhouse and Blandy, to mention just a handful. To emphasise the point still further, the sixth edition of The World Atlas of Wine contains eight pages on Port and Madeira compared to six on Portugal’s table wines.

From the perspective of its table wines, Portugal has a rather different kind of competition. In the eyes of the wine world, the smaller of the two Iberian peninsula countries is the underdog of Western Europe. It sits behind France, which is still widely regarded by many as the cradle of the world’s great classics. It has Italy to contend with, a huge wine producer whose vast array of indigenous grape varieties make it perhaps the most fascinatingly diverse wine country in the world. More to the point, it lies in the shadow of its giant neighbour Spain, whose resurgence as a wine power underlines the fact that Portugal has to shout even louder to make its voice heard above the crowd.

Despite this legacy of fortified wines and competition from its neighbours, Portugal today is grasping the nettle of a long-held, yet undeserved, inferiority complex. Instead of worrying about its heritage of native grape varieties, it now appreciates that its stock of 700 grape varieties, 300 of which are commonly used to make wine, is a treasure trove. Compared to ‘celebrity’ grapes like chardonnay and cabernet sauvignon, these are little-known varieties. As much to the point, Portugal doesn’t have a tradition of making wine by separating grape varieties. While the modern trend is to separate out grape varieties as much for marketing as winemaking reasons, Portugal’s strength as a table wine nation has more often than not been in its blends than its single varietal wines.

Whereas in the past Portugal has been somewhat tongue-tied about its native grapes, it is now finding a way to communicate its wines much better by showing firstly the inherent quality of its native varieties and secondly which of its native varieties performs best in which regions, whether as single varieties or blends. Touriga nacional for instance is regarded by many as a grape with enormous potential for making great red wines. As part of the blend in both Ports and table wines of the Douro region, it is increasingly finding its way into the red wines of regions throughout Portugal. Said to have originated in the Dão region, but almost eradicated in the 1960s and 1970s, touriga nacional is back with a vengeance and now widely regard as the Dão grape. While some think it’s almost too much of a good thing, it’s the easiest grape now to find as a single varietal because of the popular trend in its favour.

The baga grape is another grape that’s finding its feet. Most of Portugal’s wines made with baga come from Bairrada, with some also from Dão. Bairrada is closer than Dão to the ocean, so the maritime influence here is significant. But the main reasons for the baga’s resurgence are firstly the big improvement in viticulture in terms of control of diseases, preservation of old vines and better management of the annual vineyard cycle and secondly the energy of articulate groups like Baga Friends, led by winemaking veteran Luis Pato and his daughter Felipa. You see this dynamism in other regions too, the Douro for instance with its group, the Douro Boys, the most well-known figure being that of Dirk Niepoort. And you see it in the Alentejo in the south too, where figures such as João Portugal Ramos, David Baverstock at Esporão, and Carrie and Hans Kristian Jorgensen at Cortes de Cima are making waves.

This focus on new-wave Portuguese reds should not detract from the growing significance of its white wines. Thanks in part to the maritime influence of the Atlantic and in part to improvements in vineyard management and winemaking, its white wines are showing the promise that many have long believed was always there because of their suitability to relatively warm locations. The alvarinho is the flagship variety of the extraordinarly refreshing, almost sparkling dry whites from Vinho Verde in the north. Fernão pires, arinto, bical, antão vaz and encruzado, the latter the star white grape of the Dão region, all have a role to play in the growing importance of Portugal’s dry whites and their affinity with seafood. They are all pieces in the complex jigsaw known as Portuguese wine, a jigsaw beginning to take shape before our very eyes.