The locals call it Transvestite Tuesday. But the Vikings, looking ravishing in blue velvet frocks and sumptuous sealskin capes, prefer its real name: Up Helly Aa – the ancient fire festival that has been celebrated in the Shetland Islands since the days when marauding hordes ruled the seas.

Held in the main town of Lerwick on the last Tuesday of every January, the festival is probably best remembered – or not remembered – by the islanders, as an evening when they consume immeasurable quantities of alcohol and dance until they fall down. Usually at around 9am the following day.

However, for "the south mouthers", referring to those curious tourists from mainland Britain, and anybody else of foreign descent, the highlight comes between 7.30 and 8.30 in the evening, when the band of Vikings known as the Jarl Squad proudly march their dragon-headed galley through the streets of the town, followed closely by 900 ‘guisers’ – squads of men in various disguises, carrying flaming torches. Although only men are allowed to take part in this procession, the fairer sex is amply represented by the vast number of strapping torch bearers who interpret this call to fancy dress as an invitation to cross-dress. Squads of fat ballerinas, ugly schoolgirls, short-skirted pop icons and Pink Ladies come out en masse. Last January, Tavish Scott, member of the Scottish parliament, looked lovely in a luminous green tutu.

The parade kicks off at the town hall, where the banner of the black raven – the symbol of Viking rule – replaces the Union Flag. Next they march down onto King Haakon and King Erik Streets where small children sporting cardboard axes and homemade horned hats jump up and down showing an excitement not usually reserved for rapers-and-pillagers. Their parents aren’t much calmer. In fact, never have I seen so many people smiling on a cold night in January. Oddly enough, on the previous night’s news, the BBC announced that 24 January was officially the most miserable day of the year in UK. Out here in the North Sea, on an island that is closer to Bergen than Aberdeen, Blighty already seems far away.

Now, surveying all these smiles, it feels like another country.

Which in effect, it once was. The Shetlanders only joined the Scottish Crown in 1471, when the King of Norway wasn’t able to come up with the cash for Margaret of Norway’s dowry and the Scots annexed the islands as compensation.

"We were Vikings longer than we’ve been Scottish, you know!" declares the woman standing to my right. "Six hundred years we were Vikings. We’ve only been Scottish for 500." The fact that she’s only seen life during those latter 500 doesn’t seem to matter. It’s heritage that counts.

This is a belief firmly held by my next-door neighbour in my B&B: Iain Raymond Mac Airt Tingstall, from Perthshire, who claims perhaps controversially to be the rightful prince and king of all the Picts, Scots and Islanders. According to his supposed Highness, when the King of Norway "sold the Good People of Shetland’s lives and land into perpetual bondage and enslavement", he did so unlawfully. Thankfully, 534 years later, Iain has come to release them, choosing Up Helly Aa as the night when he will distribute a handwritten – and subsequently photocopied – notice freeing these Good People from their mortgages, and returning them to their rightful kingdom of Norway.

He’s chosen a good night for it. Nostalgia for the good old days of Vikingdom is raging across Shetland and as the parade gets into full swing, the brass band strikes up, and 900 guisers belt out the words to "The Norseman’s Home":

"Let us ne’er forget the race

Who bravely fought and died

Who never filled a craven’s grave

But ruled the foaming tide…

Let us all in harmony

Give honour to the brave

The noble, hardy northern men

Who ruled the stormy wave."

As the voices boom out beneath a dark, wintry sky, where the only light blazes out from the flaming torches held defiantly above their heads, it’s easy to suspend your disbelief. One minute it was a bit of fun to break up the cold, interminable winter. But suddenly it’s a welcome home party to the Viking men who have been out on their raids and now return triumphant, bringing the treasures and provisions that will keep us through the winter.

But though the fires of Up Helly Aa might evoke images of a Viking life once lived, the curious reality is that these celebrations have more Victorian than Viking roots. Although this ancient fire festival that marks the end of winter and the return of the Sun has always been celebrated on Shetland, how it was celebrated changed somewhat at the end of the 19th century.

"At the end of the 1800s it started to get a bit out of hand," explains Davy Cooper, Shetland’s local storyteller. "Revellers would drag barrels of flaming tar down the streets, and buildings were starting to get damaged, so the Victorians decided to calm it down a bit. The Viking bits we see today, with the burning of the galley and the Jarl Squad are largely a Victorian invention."

Not that Davy thinks this lessens the spectacle, nor the link back to the original Viking festival. "I think the fact that they choose to dress up as Vikings says a lot about the feeling locally of our link to our Norse heritage. Vikings mean something special to Shetland."

John Fraser, the brother of this year’s Guiser Jarl (aka head Viking) is equally revved up about their modern-day powers: "I don’t know of any other festival anywhere in the world that brings a community together the way Up Helly Aa does. All walks of the community from the very youngest to the eldest, and they’re all here together having a great time."

And it’s not just this one night that brings people together. Preparations for Up Helly Aa get underway early on in the previous year, when the Guiser Jarl and his squad set to work designing and making their costumes, the galley ship and the torches. There’s real cloak and dagger secrecy to the affair, with no one but the Jarl Squad allowed to see the galley until the big day, when it is marched through the streets to its final destination: the burning site. To be in the Jarl Squad, you have to be a friend or kin of the Guiser Jarl, who has to be elected on to the Up Helly Aa committee and serve on it for 15 years before earning the honour.

To join one of the other squads, you have to have lived in Lerwick for at least five years, and it’s up to each of these squads to come up with a 10-minute sketch that they perform at nine different community-turned-drinking halls across town throughout the rowdy night ahead. The sketches are supposed to reflect some aspect of the year’s local affairs, though dressing up as Girls Aloud and shaking your fake breasts appears to be a hot favourite.

Though not as hot as the real climax of the evening. After half an hour of being marched through the darkened streets, the Viking galley is brought to rest, rather eerily, in the middle of a walled children’s playground, around which the crowds take their places. The kilometre-long (0.6mile) line of Vikings and torch bearers, still singing and cheering and waving their fiery torches file in behind it, moving into a carefully choreographed spiral, until every man is circling the galley, in a terrifying amalgam of Lord of the Flies and the pilgrimage to Mecca.

"Three cheers for the men who built the torches!" cries the Guiser Jarl from his place of power on top of the ship. "Hurrah, hurrah, hurrah!" "Three cheers for the men who built the galley!" "Three cheers for the Up Helly Aa!" "Three cheers for the Guiser Jarl!"

Then there’s just enough time for the Guiser Jarl to clamber out of the ship before a flare screeches into the air, the signal for the concentric circles of men to begin tossing their torches into the galley. In they go, a flaming Jenga, and within a minute the dragon ship is engulfed in a swirling, curling troupe of flames, wildly dancing under the night sky. Around the blaze of glory, the crowd warms their hands and surveys the reign of fire with satisfaction.

There’s now only one thing left to do: get pished.

Images reproduced with kind permission of shetlandtourism.com