It is 2am and the beautiful people are starting to arrive, disappearing one by one into a cloud of smoke, pulsing lights and throbbing dance music.

In Amnesia’s cavernous interior, go-go dancers in microscopic garments gyrate high above the dance floor. They are selected each year in televised casting shows held in Eastern Europe. Up to 4,000 people are expected to pack the club tonight to hear the DJ Paul van Dyk man the turntables – a huge draw for Britons – after a month-long forced absence.

Four lads from Northampton are abuzz with anticipation. “We were bricking it before we came out to Ibiza,” says Adam Loftus. “We thought the clubs might be closed.”

After a stand-off with the authorities over drugs that threatened to overshadow the island’s prime tourist season, Ibiza’s dance clubs are once again open for business. But the experience has left a cloud of uncertainty over Europe’s party capital. Clubbers and promoters are asking themselves whether the latest crackdown on drugs represents the beginning of the end of Ibiza’s big, long party.

“People don’t want to be persecuted when they come to enjoy themselves on holiday,” says MartÍn Ferrer Casals, the owner of Amnesia. “If they don’t come here they will go to Croatia or wherever. There are plenty of other places that want to be Ibiza.”

Since its carnival-like club scene erupted in the 1980s, authorities have maintained a largely permissive attitude towards drug use on the Mediterranean island. But that changed last month when Madrid’s representative ordered the closure of Amnesia and two smaller dance venues, Bora Bora and DC-10. After the month-long sanction, the clubs have reopened. DC-10 is fighting a two-month closure order in the courts.

The clubs “were closed because they allowed drug use, there was negligence in its control, and there is convincing proof in the police reports”, said José Manuel Bar, the state administrator in Ibiza. “Closing them was a tough measure, but we have to fight drugs on the island.”

The clubs deny the charge – or say that, at the very least, they have been unfairly singled out by authorities. Many suggest darkly that they are victims of political feuding, or that authorities are seeking a bigger cut of the clubs’ multimillion-pound business.

“This is the best club on the island, where everything is about the music, so [the closure] doesn’t really make any sense,” says Mr van Dyk, as he prepares to play to thousands of frenzied Britons. “If it is about illegal substances and drug abuse there are definitely other venues on this island you should go for, but not Amnesia.”

Club owners say that too tough a clampdown could prove disastrous for Ibiza’s tourist industry. More than 350,000 pass through Amnesia alone each summer and there have been reports of numerous cancellations this year by clubbers from Britain. Ibiza’s bar and restaurant association says that takings are 30 per cent down this season.

“The damage is incalculable,” says Mr Ferrer, who directly employs 350 people. “We have lost millions of euros, not counting the damage to our image.” He says he had 12,000 cancellations in June and 15,000 in July.

Others on the island also fear the Government could end up killing Ibiza’s golden goose. “It was an incredibly stupid thing do,” says Jesús, 44, a taxi driver. “We all depend on tourism, directly or indirectly.” The lack of clubbers was particularly noticeable on the main road leading to several of the largest clubs, he says.

Authorities insist that they did not take the decision lightly. The clubs that were closed, they say, were repeat offenders. According to a report in the local Diario de Ibiza, police found “snorting booths” in 2004 in one of the clubs closed – it did not say which – complete with glass ledge and door locks. The owners reportedly claimed they were phone booths, despite the presence of cocaine, snorting tubes and blood-stained tissues – and lack of telephone. When police returned the following year they had not been removed. “If [police] went every 15 days, things would be the same,” said an official quoted by the newspaper. “The company had no intention of correcting the situation.”

Authorities say that the drug problem is getting worse. Ten people died in Ibiza last year as a result of drugs, they say, including deaths from heart failure or “paranoid attacks that led people to throw themselves from hotel windows”. The local hospital says that it treats an average of ten cases a week of drug or alcohol intoxication during the summer. Authorities also worry that the drug scene could spiral out of control, scaring off other kinds of tourist. Two bystanders were injured last year when they were caught in a cross-fire between rival British drug gangs in the resort of Sant Antoni de Portmany (San Antonio).

The British Embassy, which has to deal with its fair share of drug and alcohol-related problems every year, warns holidaymakers to avoid excess – a somewhat plaintive plea in Ibiza’s hedonistic culture. “Everybody wants to let their hair down when they are on their holidays, but don’t leave your common sense at home,” says an embassy spokesperson.

That advice has plainly been ignored by many of the punters at Amnesia as Paul van Dyk takes to the decks. “This is it,” says one addled-looking clubber who is unwilling, or unable, to give his name. “This place is a f***ing cathedral!”

High numbers

10,000 The capacity inside Privilege Ibiza – the world’s biggest nightclub

7,000 Average number of people served at the bars of Amnesia, Bora Bora and DC-10 nightly

38.7 Percentage of Ibiza’s tourism generated by the British

450 People caught with illegal drugs during weekend of “opening parties”

Sources: www.liveibiza.com; www.privilegeibiza.com; www.ministryofsound.com; Times archives

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