"This place has the air - mmmm - you just want to eat it. I have never painted so much. I work in the morning and at night. In the afternoons I go surfing if the waves are good. I don't sleep a lot. I just keep working."

Filippo Garrone is an Italian artist from Genoa who is staying at the artists' retreat in Cill Rialaig, on the Iveragh peninsula, Co Kerry. Based in a deserted village at Ballinskelligs on Bolus Head, where two of the cottages have been converted and two more are nearly ready, the retreat accommodates artists looking for tranquillity and inspirational views. Visiting artists can stay for a month at a time and only have to pay for food.

Just outside the door of Garrone's cottage is a magnificent panorama of brooding sea, sky, islands and promontories, including Scariff Island and Hog's Head. Inside, part of the cottage has a glassed-in ceiling (tastefully invisible from the outside) so that he can look up at another vista of rock, heather and sky as he paints. There is also the advantage of seeing cows and sheep (both of which figure frequently in his work) grazing above him: "Sometimes if it is windy I think the cows will fall and come crashing through my ceiling," he jokes.

Aurelio Caminatti, also from Genoa, is staying in the other cottage. Voted Italian Artist of the Year last year, the 74year-old painter knew Picasso and is a friend of the novelist Umberto Eco. He is a regular at Cill Rialaig. His current canvases are adorned with pieces of driftwood fashioned to look like the local ancient standing-stone crosses: "This place gives me inspiration and energy," he tells me in French. "There is nothing like this - so sincere, so wild and magical - in the Mediterranean."

Cill Rialaig is the brainchild of businesswoman and former publisher Noelle Campbell-Sharp, who discovered the beauty of the area when she bought and restored a row of adjoining cottages and farm buildings in Ballinskelligs as a holiday home in the 1980s. With the help of friends and a Lottery grant of £6,000, she bought the village for £30,000: "It was my investment in my neighbourhood," she explains. "I did it for the love of the decent, principled people here. I wanted them to have a resource they could be proud of and have access to. A resource that will last. And once I promise something, I have to deliver."

A veritable dervish of irrepressible energies, Campbell-Sharp is honorary managing director of the Cill Rialaig Project and is known and greeted warmly by everyone in the area. The board in charge of Cill Rialaig, which was established in 1991, is made up of local people. The project is taking "a heart-breaking length of time" to complete, however, because of the amount of funds that are needed. The cottages, some of which date back to 1790, cost £50,000 each to convert. Campbell-Sharp chose the architect Alfred Cochrane, who had done such a sensitive job on her own house, to design the conversion. The result is that on the outside, the cottages look very authentic. The original stones have been added on as a cladding over an inner lining of concrete blocks.

Inside there is a large workspace, off which are a compact kitchen and bathroom. There is an upstairs loft for sleeping. A stove and two storage heaters provide plenty of heat. Campbell-Sharp's plan is to convert seven of the 14 houses, with either thatched or slate roofs.

The village of Cill Rialaig was deserted in the 1950s. One of the original inhabitants, Mrs Kelly, is still alive and lives locally. Like the other houses, the walls of her original cottage are still standing.

"When we finished thatching the first two cottages two years ago, it was a summer night and we had set-dancing up here for hours," recalls Campbell-Sharp. "Mrs Kelly came and she said the last party in the village was 60 years ago when a barrel of rum came in on the waves."

More than 130 visiting artists have spent time at Cill Rialaig, 40 per cent of whom come from abroad. These include Canadian novelist Jane Urquhart, and Italian architect Luciano Tempo who is donating £50,000 to the project to fund the restoration of a cottage. Irish visitors have included Felim Egan and Brian Maguire. There tends to be a preponderance of artists, "because of the wonderful quality of the light here, which is like the light at St Ives", explains Campbell-Sharp.

Artists are also particularly welcome because they often leave "a donation" which can then be sold to raise funds for the project. Aurelio Caminatti has donated several paintings, one of which has just been bought for more than £2,000 by a barrister. Such donations, and an impressive variety of fine art and crafts, are all on sale in phase two of the Cill Rialaig Project, the Applied Arts Centre at nearby Dungeagan, funded by Udaras na Gaeltachta.

THE centre is full of people when we visit on a rainy summer afternoon. There are local women drinking tea and eating tea-brack in the cafe, where a turf fire is sending out its distinctive aroma from a hearth taken from the ruins of legendary local seanachai Sean O Conaill's cottage. There is a room for children where whimsical fabric figures created by artist Des Dillon swing on hammocks and climb trees, and where the children can spend hours painting their own masterpieces (and then hang them on the walls).

There is a large exhibition space which is currently full of work by Dutch artist Pieter Koning. Plans for the centre include workshops for local people given by some of Ireland's leading artisans.

But there's more. Inspired by the Tate at St Ives in Cornwall, Campbell-Sharp is pushing for the establishment of a large international art gallery in Waterville, to exhibit work by visitors to Cill Rialaig and other contemporary artists, and also act as a space to show some of the collection from the National Gallery which is not currently on view. An application for ERDF funding has been made, and Bord Failte is apparently enthusiastic. It will cost £3 million, says Campbell-Sharp, noting that the Tate at St Ives (built three years ago) cost even more.

She believes the gallery would act as a major attraction for the 1.2 million people who visit the Ring of Kerry every year: "A lot of wealthy people come to Kerry to relax for their holidays and would like to invest in a painting or sculpture to take home." Meanwhile, how have the local people responded to Cill Rialaig? "They have come full circle from suspicion to enthusiasm, to setting up their own businesses," she notes. Gerard O'Connell, who has been working on the Cill Rialaig project for four years, is from nearby Fermoyle. Most of the people he grew up with have emigrated, and he had been contemplating the same, but is now about to start up his own framing and woodworking business.

Clare Dillon, from Dungeagan, is working in the Applied Arts Centre shop for the summer before returning to her ceramics course in Limerick RTC: "When I was in Transition Year in school I worked with some of the artists in Cill Rialaig, and it gave me a real gist for art before applying for art college."

One artist who spent three months at Cill Rialaig, Mick Mulcahy, has left a lasting souvenir of his time there. The gable wall of the An Oige hostel and shop has been transformed into a lively mural. Proprietor Hannie O'Shea has no objections: "Some of the artists are a bit wild but they do no harm. They create a bit of excitement. Mick Mulcahy was a great friend, and everyone who passes has something to say about that mural. They come in to the shop and buy an ice-cream and some say it's terrible and others say they love it."

On Saturday August 30th the Cill Rialaig Am-Am Golf Classic takes place at Waterville Golf Links, followed by a gala dinner with an Italian theme in Waterville, to raise funds for Cill Rialaig. There will be an auction of (among other items) 16 plates hand-painted for the occasion by some of Ireland's top artists. Tel: 066- 79297.