Life on Portugal's Coast of Kings, where Ian Fleming met the triple-agent whose gambling inspired 'Casino Royale'

The Portuguese coastline stretching out from Lison has long been nicknamed Costa dos Reis — the Coast of Kings) and for good reason. Fernando II of Portugal built his summer castle retreat, Pena Palace, in the mountains above Sintra, a short drive from the coast, turning the area (now part of the Sintra Cascais National Park, a UNESCO World Heritage site) into the European Romantic capital of the 19th century.

Lord Byron deemed it ‘glorious Eden’ when he visited nearby Monserrate — a Moorish palace with sublime parklands where a redesigned rose garden was officially opened in 2011 by the then Prince of Wales and Duchess of Cornwall. Luis of Portugal moved downhill (topographically, not metaphorically) in the 1870s with the siting of his summer residence in the Citadel of Cascais. The fashionable and wealthy followed, transforming a once quiet fishing village into the chic and cosmopolitan resort it remains today.

In the 1940s, however, it was the death and destruction raining down upon the rest of Europe and North Africa that resulted in these rich, regal and political refugees taking shelter in the Portuguese sun. Antoine de Saint-Exupéry, author of The Little Prince who stayed at the Hotel Palácio Estoril, wrote: ‘In 1940 Cascais, happiness was staged so that God could believe it still existed.’

The Hotel Palácio Estoril, completed in 1930 and one of the grandest hotels on the coast (www.palacioestorilhotel.com), was the residence of choice for the Spanish, Italian, French, Bulgarian and Romanian royal families (and is still frequented by their descendants), as well as the actress and socialite Zsa Zsa Gabor, film director Charles Guggenheim and British economist John Maynard Keynes. It was also a meeting ground for the world’s spies, who descended upon Cascais and Estoril to ply their tradecraft, stealing secrets and spreading misinformation among rival Intelligence agents from both the Allies and the Axis powers of Germany and Italy.

The most famous of these was Ian Fleming, who checked into the Palácio, the Allies’ favoured hotel, on May 20, 1941. He recorded his occupation as ‘government official’ in the register, now on display in the hotel’s historic Royal Gallery. In reality, Fleming, a Naval Intelligence Officer, was there to oversee Operation Goldeneye — maintaining links with Gibraltar in the event that Franco’s Spain aligned with, or was invaded by, Axis powers. It was also the ideal spot to keep an eye on the Serbian triple agent Duško Popov, who regularly met his German handler in the Palácio’s cocktail bar.

Despite being recruited by the Abwehr, Popov was sympathetic to the Allies and tried to warn the FBI about impending attacks on Pearl Harbour, but was distrusted and ignored by its director J. Edgar Hoover. He did, however, play a successful part in Operation Fortitude, the Allied plot to deceive the Germans about the location of 1944’s D-Day landings.

It is rumoured (although unproven) that Fleming once observed Popov — a suave playboy on whom Fleming is thought to have based James Bond — using his mission expenses in a high-stakes game of baccarat at the Estoril Casino next door; an episode which, if true, may have directly inspired his first 007 novel, Casino Royale.

From his room on the Palácio’s third floor, Fleming could observe Gestapo agents congregating at Pastelaria Garrett, the café opposite where locals enjoy treats today, such as pastel de nata (created by Lisboan monks). The German spies’ cheap suits contrasted with the Allied agents’ classic Savile Row tailoring and even more so with the ultra-modish attire of the rich refugees — a source of disdain to conservative locals. Peggy Guggenheim caused quite the stir among the Cascalenses, and not only with the fashionably louche cut of her clothes. ‘Peggy would go swimming naked in the waters off Cascais and make passionate love with her then partner Max Ernst on the rocks below the Casa de Santa Maria,’ reveals Neill Lochery, professor of Mediterranean and Middle Eastern Studies at University College London and the author of Lisbon: War in the Shadows of the City of Light, 1939–1945.

Scandal would arise in July 1940, when a German/Spanish plot (known on the Continent as Operation Willi) was contrived to convince or coerce the Duke of Windsor to return to Spain — through which he had just fled from occupied France — where he would be ‘encouraged by the Nazis to take the throne in Britain as a kind of stooge king, following what they hoped was a successful German invasion,’ reveals Prof Lochery. Luckily, Winston Churchill had been alerted to the scheme (following the Duke’s unpatriotic remarks at the Ritz Hotel in Paris) and the Duke was swiftly extracted from Portugal and installed as the Governor of the Bahamas until 1945, far removed from the theatre of war.

The dust has long since settled and, on my visit to the Palácio’s ‘Estoril Bar’, I spy more golfers discussing their handicaps over double gins than double agents handing over secret dossiers. The Palácio’s 18-hole, par-69 golf course, redesigned in 1936 by Mackenzie Ross, has frequently hosted the Portuguese Open. It’s also where British intelligence used to meet local informants and pay them for services rendered during the war.

Beautiful villas still line the grand avenues around the Palácio where secret agents once intermingled with the aristocracy. ‘The old money is still in Estoril,’ says Prof Lochery. ‘The town is, in many ways, like a time capsule from the 1940s.’

There’s definitely still a frisson of intrigue in the air, too. I spot what I’m reliably informed is a European countess sipping her Champagne cocktail, as a strong silent type in Fleming’s old chair (the one to the left of the bar) remains motionless, his eyes scanning the room behind dark sunglasses.

On the other hand, he could have simply fallen asleep. The vodka martinis they mix here are quite lethal — although perhaps not literally as lethal as when this coast of kings really was ​the ​world’s capital of espionage; a glamorous, but precarious refuge from a world torn apart by war.

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An earlier version of this feature originally appeared in the June 25, 2025 issue of Country Life. Click here for more information on how to subscribe.