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The Rocks, immediately beneath the Sydney Harbour Bridge, is the heart of historic Sydney. On this rocky outcrop between Sydney Cove and Walsh Bay, Captain Arthur Phillip proclaimed the establishment of Sydney Town in 1788, the first permanent European settlement in Australia. Within decades, however, the area had become little more than a slum of dingy dwellings, narrow alleys and dubious taverns and brothels. In the 1830s and 1840s, merchants began building fine stone warehouses here, but as the focus for Sydney's shipping moved to Woolloomooloo, the area again fell into decline. By the 1870s and 1880s, the notorious Rocks "pushes", gangs of "larrikins" (louts) mugged passers-by when they weren't beating each other up. The narrow street named Suez Canal was a favourite place to jump out from. Some say the name is a shortening of Sewers' Canal, and indeed the area was so filthy and rat-ridden that whole streetfronts had to be torn down in 1900 to contain an outbreak of bubonic plague. The Rocks remained a run-down, depressed and depressing quarter until the 1970s, when there were plans to raze the remaining cottages, terraces and warehouses to make way for office blocks. However, due to the foresight of a radical building workers' union which opposed the demolition the restored and renovated historic quarter is now one of Sydney's major tourist attractions. Despite a passing resemblance to a historic theme park, it's worth exploring. It's also the best place, apart from the airport, for tax-free shopping. There are times when the old atmosphere still seems to prevail: Friday and Saturday nights can be thoroughly drunken - so much so that there's a prominent police station and officers patrolling on horseback. New Year's Eve is also riotously celebrated here, as fireworks explode over the harbour. The best time to come for a drink is Sunday afternoon, when many of the pubs offer live jazz or folk music. Just exploring the narrow alleys and streets hewn out of the original rocky spur is the chief delight of The Rocks , a voyage of discovery that involves climbing and descending several stairs and cuts to different levels. Down the steps from the Sydney Visitor Centre, a stroll north along Circular Quay West brings you to Campbells Cove , where Campbell's Storehouses is fairly representative of The Rocks' focus on eating and shopping for souvenirs, clothing and arts and crafts in beautifully restored sandstone warehouses; these storehouses were once part of the private wharf of the merchant Robert Campbell, built in 1839 to hold everything from tea to liquor. A replica of Captain Bligh's ship, the Bounty , is moored here between cruises , adding a Disneyish atmosphere, while a luxury hotel, the Park Hyatt , overlooks the whole area. Going past the hotel to Dawes Point Park under the Harbour Bridge brings you to Dawes Point , a favourite spot for photographers, separating Sydney Cove, on the Circular Quay side, from Walsh Bay and several old piers, one of which houses the wonderfully sited Wharf Theatre . Heading back to Campbells Cove, you can climb the Customs Officer's Stairs to Hickson Road where you can browse in the Metcalfe Stores , another warehouse-turned-shopping complex, this time dating from around 1912. Exit from the old bond stores onto George Street, where at weekends you can further satisfy your shopping urge at the shaded Rocks Market . There's more shopping at the Argyle Stores , on the corner of Argyle and Playfair streets, a complex of decidedly more tasteful and upmarket boutiques in a beautifully restored set of former bond stores; on the top floor you can take in great views from the bar of bel mondo, also accessible from Gloucester Walk. The Argyle Stores is just near the impressive Argyle Cut , which slices through solid stone to the more residential area of Millers Point . The Cut took eighteen years to complete, carved first with chisel and hammer by convict chain gangs who began the work in 1843; when transportation ended ten years later the tunnel was still unfinished, and it took hired hands to complete it in 1859. Up the Argyle Steps and along the narrow brick pedestrian walkway of peaceful Gloucester Walk you come to the tiny Foundation Park . It's quite a delight to stumble across - remains of cottage foundations discovered in architectural digs have formed the basis for an arrangement of sculptural installations representing Victorian furniture. You can follow Gloucester Walk back to the northern end of George Street for a drink at The Mercantile , one of Sydney's best Irish watering holes. Gloucester Walk also leads to the pedestrian entrance of the Harbour Bridge on Cumberland Street , the location of a couple of classic old boozers, the Glenmore and the Australian . From the latter, head down Gloucester Street to the Susannah Place Museum at nos. 58-64 (Jan daily 10am-5pm; Feb-Dec Sat & Sun 10am-5pm; $7; www.hht.nsw.gov.au ), a row of four brick terraces built in 1844 and continuously occupied by householders until 1990; the buildings are now a "house museum" (including a re-created corner store) which conserves the domestic history of Sydney's working class.
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