Polo on ice? It's so cool, darling

Why don't you let the other team win?" The little girl asked the question in innocence, as her father and his polo team breakfasted in Le Restaurant at the Palace Hotel.

It was the final morning of the World Cup on Snow - as, with characteristic absence of shyness, St Moritz styles its polo tournament, played on the frozen lake which stretches from below the Palace to the mountains on the far side of the Engadin Valley.

The atmosphere is scented with pre-match expectation - a fusion of strawberries, stewed figs, scrambled eggs and the tang of unbridled egomania. Daddy is not intending to lose; nor, though, are the other daddies in three rival teams.

The Palace is indisputably the place in which to prepare for the first of St Moritz's lake occasions (cricket and racing follow the polo), whether as player or spectator. It looks as though it were built by a Victorian plutocrat, perhaps a Cheshire mill-owner wanting a folly on the north Welsh mountains.

The difference is that, far from being shielded by crags or conifers, the Palace sits plumply in the heart of town, commanding attention. It is a hotel of a sort which would never be created now; a warren of rooms and passages, many of which - including The Badrutt Suite, almost an entire chalet of wood-lined time warp - seem little changed from the day in 1864 when Johannes Badrutt invited four British guests, then about to depart at the end of their summer holiday, to return in the winter.

By way of inducement, he offered to pay their return fares and meet all their costs if they loathed the experience. In the event, they stayed until April.

A treasury of relics survives from that era: there is a marquetry settle of illustrious grandeur, the bust of a cardinal lodged beneath an arch, a fragment of pew parked opposite a portrait of one of the Badrutts, a Madonna (reputedly by Raphael) and exquisitely carved ceilings of teak and Douglas pine.

Yet change is afoot. Three years ago, the Badrutts invited Rosewood Hotels to manage the Palace. Eighty six rooms have subsequently been redone (bathrooms with honeyed Italian marble) and another 50 are receiving the treatment.

Over the years, there have been casualties among old-guard guests: shrouded beneath a dust-sheet in a cavernous room at the end of a service tunnel in the depths of the hotel lies a cream Rolls-Royce, with a Milanese number plate - abandoned by its owner more than a decade ago, after he realised that his cash flow was not quite equal to his bill.

But there is scarcely a shortage of replacement swag-carriers, eager to trawl the inescapable trophy cases of de Grisogono, Chopard, Tiffany and Cartier. (There are now etiquette classes at the Kinder Club, where parents can dump children between 10am and 7pm.)

Change has been accelerated since 11 September. "We have had more people since then," says Max Newiger, the Palace's director of sales. "They feel secure in Switzerland - we control our borders." The polo offers a heartening excuse to drop in and watch the action, perhaps from the bar, with its alcove framed by dark Corinthian pillars, and tables with sculpted copper tops and voluptuously carved legs - and mature prices (about £8 for a glass of La Ina manzanilla).

Out on the lake, about 18 inches of ice supports some gripping horsemanship. The spectacle is curiously medieval: pinnacles of white tents crowd the grandstand's edge, as if a mountain tribe has pitched camp in readiness for battle. This impression is especially convincing if you fling yourself off the Corviglia mountain (ideally when suspended from a hang-glider). An instructor-guided descent takes 10 minutes and costs £100, which is more or less the standard time/price ratio for St Moritz; do take care, though, to avoid incoming jets (generally chartered by the hotels) or the helicopters which land on the flatroofed modern block, about 100 yards from the Palace.

Back at ground level, crowds swamp the grandstand or saunter around the field - tanned, swathed in furs and jewellery (many of the men, that is; their women are slightly less tanned). Players thunder over the ice - lightly covered with snow, some of which has even fallen from the sky, rather than been fired out of the snow cannons which feed the piste - and into the hoardings, their ponies' hooves kicking up a momentary "dust" of ice and snow, until, on the final day, the surface has been pummelled hard. The only real concession to conditions is the ball - an orange-red globe, which would not be out of place on a beach.

Between chukkas, the Palace gang refresh themselves in the VIP tent beneath a mountainous chandelier, returning to impassioned commentary, delivered alternately by a local Swiss dignitary, speaking a kind of German, and a public school sportsman, speaking a kind of English. "There are plenty of Latins out there today, so there are some un-understandable words," he says, before pointing out that, "Dynergy are certainly showing signs of un-relentless attack." Happily, everyone in the grandstand is in un-unforgiving mood. Perhaps they have read the programme advertisement for one of the teams, Bank Hofmann. "There are many remarkable affinities between polo and investment management. Both are fast-paced, action-packed strategy games. And, in both cases, it takes well-balanced teams with the right mind-set to win."

The match ends: Bank Hofmann have lost 10-4. It's enough to unbalance Daddy.

Way to go

Marcus Scriven travelled to St Moritz with FlexiSki (0870 9090 754;www.flexiski.com). Four nights half-board at Badrutt's Palace Hotel is £1,570pp, including return flights.