The man I needed to see was called "Lizard" and I found him curled up on a plastic sun lounger outside a heaving beach bar at Playa d'en Bossa, a couple of miles south of Ibiza town. Lizard, a Spaniard in his 30s, had somehow fallen asleep. Waves of thumping trance music blaring from two shoulder-high speakers less than 20 feet away hadn't disturbed him. True to his reptilian nickname, he seemed comfortable in 32C mid-afternoon heat, even though he was wearing jeans and a scruffy shirt.
Lizard stirred long enough to deliver the bad news. He'd sold out of ecstasy pills earlier in the day, but was expecting another consignment later that evening. The choice, he said, was to wait a few hours or trade with one of the other dealers moseying on the sea front.
Within 10 minutes, a man who said his name was Francois was kneeling in the sand next to a group of British visitors a few feet away, handing out flyers for a club that opens at 8 a.m. on Sunday and closes 22 hours later.
Francois produced two ecstasy pills (stamped Y2K) from his sunglasses case and sold them to one of the men for 4,000 pesetas (about £9). There was nothing surreptitious about the deal. Francois wasn't looking over his shoulder as he pocketed the money, and nobody in the vicinity seemed to notice. There were no police officers in sight. Francois disappeared in the direction of the bar, where dozens of people were defying the sun by dancing underneath a series of water sprinklers.
Playa d'en Bossa, known to everyone as Bora Bora beach, is one of the trendiest places on Ibiza. It is a clubber's idea of paradise - great music, cheap drugs and high expectations of casual sex.
Michael Birkett, the vice-consul who resigned in horror at the behaviour of British tourists last year, has a different perspective. To him, Bora Bora is a hedonistic hell. It is the attitude of the Ibizans, though, which is the most intriguing. They moan about the excess every now and then, but they are pragmatic: drugs and clubs are fantastic business.
While tales of orgiastic revelry and hooliganism have consistently grabbed headlines over the past five years, British detectives have watched in bewilderment, trying to fathom how the drugs trade has flourished unchecked and why their Ibizan counterparts have had such miserable luck trying to identify the ringleaders of the £200 million industry.
Last year, they began to realise what was going wrong. Investigators at the national criminal intelligence service (NCIS) began liaising with the Spanish authorities over ways to stop trafficking to Ibiza and the other Balearic islands - Majorca, Menorca and Formentera.
During their research they uncovered some revealing statistics. In 1997, there were 600,000 British visitors to Ibiza. The total number of these arrested for ecstasy possession that year across the Balearic islands was two, neither of them on Ibiza. According to official Spanish records, no British tourists were arrested for ecstasy possession anywhere in the Balearic islands between 1990 and 1996.
Last year, 700,000 tourists travelled to Ibiza from Britain, and 23 were arrested for drugs offences; this year, 900,000 will have visited the island by the end of the summer. There have been 19 arrests so far, but it is not clear how many involved ecstasy.
The Civil Guard on the island is overstretched - out of season, the population is just 83,000 and crime rates are low - but police in the UK have been astonished by the Ibizan attitude to the problem.
"The island is the drugs capital of Europe, probably the world, during the summer, and it has been for many years, but who would guess it?" says a source. "The police want to be seen to be doing things, but they are not very constructive. They can't understand the idea of intelligence-led policing. If they see someone trafficking or dealing, they will step in. But they don't look for it."
Even basic techniques are ignored. Officers rarely do spot-checks of tourists at the airport or search cars coming off the ferries in the ports at San Antonio or Ibiza Town.
John Abbott, the director general of NCIS, led a British delegation to Madrid and Ibiza last year to encourage a more proactive approach, without much success. "We don't get any meaningful information from the police on the island," says a source. "Either the police don't know what is going on, or they do know and they are not telling us. We have to accept that they have their own way of doing things. It's frustrating, but there is nothing we can do."
And the effect of this hands-off approach? "Mayhem." Until recently, traffickers have not had to worry unduly about the authorities, though this might change as investigators from several European countries begin to concentrate on the island. Although British drug dealers often fly out to Ibiza, the business they do is regarded as "incidental and opportunistic". It is believed that most of the drugs are bought in Amsterdam, where prices are cheapest. There is little, if any, manufacturing on the island.
There are two pan-European surveillance operations currently under way that could force traffickers to use more sophisticated methods than driving a car crammed with drugs from Holland and catching a boat to the island.
Drugs, mostly ecstasy but also cocaine and speed, fuel the dance culture, and - with 35 British clubs hiring venues this year, including Cream, the Ministry of Sound and Manumission - the biggest headache for dealers is ensuring punters know where to buy their pills and having enough of them to go round.
According to Howard Marks, the one-time drug baron, who has been working on Ibiza as a writer during the summer, the street trade is controlled mainly by Spanish gypsies, who recruit people such as Lizard to roam the beaches during the afternoon and tout for business.
"They have five months of the year to make as much money as they can before Ibiza goes to sleep. Up until now, there has been very little trouble. You don't get the kind of drug-associated violence and intimidation you get in Britain." Marks says the criminals have not gelled into mafia-style gangs - yet.