Residenza Napoleone III

Waking early in the morning at Residenza Napoleone in Rome, for several minutes I thought I was still dreaming. And that's not exaggeration, or metaphor, but simply the absolute truth, and possibly the only way I can convey what an extraordinary experience staying here is. I opened my eyes and found I was lying on a vast bed, so comfortably I felt I was floating; drawn around me were heavy silk canopies, and in the dawn light I could just make out, six feet above my head, two vast wrought-iron candelabras suspended on thick ropes from an ornately carved double-height ceiling. And then a sleepy arm reached out from across the bed, and I realised that this was not, in fact, a night-time princess fantasy but a real-life princess experience.

The Residenza Napoleone is much, much more than a luxury hotel. Luxury hotels provide an idealised version of real life; staying here provides a privileged glimpse into a quite different world. It is not really a hotel at all, in the traditional sense, but rather probably the poshest bed and breakfast on the planet: a suite of three rooms in the Palazzo Ruspoli, one of Rome's most historic palaces, which is hired out to paying guests. The enterprising Principessa Letizia Ruspoli – who with her husband and grown-up children still divides her time between this home, a country seat and vineyard in Tuscany, and her riad in Marrakech, Dar 7 – has hit on this venture as a way of maintaining the family in the style to which they have been accustomed since the 14th century without resorting to selling off Caravaggios.

So there is no bar, no restaurant, no 'scene', here; what there is, instead, is gobsmacking beauty, an extravagant amount of space, and meticulous service. From the Via Condotti, a pair of wooden double doors (easily high and wide enough to accommodate a horse and carriage) conceal a wide, sweeping marble staircase lined with busts of Roman emperors. A butler shows guests into the apartment, which opens with an elegant dining room hung with moss silk wallpaper and lined with oil paintings of ancient Roman monuments; 12-foot-long velvet curtains frame a pair of deep window seats.

The next room is equally elegant, but less formal, a primrose yellow drawing room where, on arrival, we found the side tables laid with trays of snacks and drinks (including a bottle of Chianti Classico from the Ruspolis’ vineyard) and the air scented with posies of jasmine in antique silver jugs. The bedroom beyond boasts six vast oil paintings, a bed fit for an emperor, and a delightful bathroom with walls of old marble, rich and creamy as gorgonzola, and mirrors foxed and golden-hued with age – fabulously flattering to the complexion and, therefore, supremely nourishing for the spirit.

The Ruspolis have a long tradition of being marvellous hosts. Alexander Dumas, in his novel The Count of Montecristo, indicates the terrace of the Palazzo Ruspoli as the best location from which to watch the Roman carnival. The dressing table in the Residenza Napoleone is crammed with things thoughtful hostesses place in their spare rooms, like adaptor plugs and spot stain remover for clothes. And when Letizia's husband baulked at the notion of installing the flat-screen TV expected by modern guests in the drawing room, the princess circumvented the issue by hiding the screen behind a grand oil painting, a marvellously Da Vinci Code touch.

It was very tempting not to leave at all. Luckily, the Ruspolis have supplied the yellow drawing room with piles of encouraging guide books. The Spanish Steps, with the adjacent tiny and enchanting Keats-Shelley House, are five minutes walk away; if even that seems too much effort, you might still manage to potter the ten yards across the road to stroke the handbags in the fabulous Fendi flagship store. In any case, since only breakfast is available in house, you will eventually be driven out by hunger. Happily both Letizia and her manager, Beatrice, are women of impeccable taste and happy to recommend and reserve the best dinners in Rome.

We returned from dinner to find the candelabras in the bedroom each twinkling with dozens of candles, and a digestif tray of grappa and truffles on the bed. So with a flick of a switch we climbed onto the bed, lowered the projector screen and pondered the DVD selection. (Mr Smith wanted Gladiator, I preferred Roman Holiday; we settled on Troy.) The scene-setting fairies reappeared before breakfast, when we emerged from the bedroom to find a fire of pine cones blazing next to our beautifully laid breakfast table.

Since the success of Residenza Napoleone, a second suite, the Roof Terrace, has been opened in the eaves of the palazzo. This is very different: a charming hideaway, with rooms almost miniature in scale, but with a spacious multi-level terrace from which to gaze over the rooftops of Rome. Both suites are frankly divine. What can I say: get here. Even if you have to sell a Caravaggio.