Michelle Obama will arrive in Marbella this week for her summer holiday. But does the presidential seal of approval really mean the 'Costa del Crime' has finally turned the corner?As Michelle Obama sits on the stone terrace of her five star Andalusian hotel this week, with sweeping views across the lush golf course to the Mediterranean Sea below, the stress of Washington will seem a long way away.

Swallows ride the breezes above fluttering golf flags, and the sound of cicadas in the hot afternoon mingles with soft jazz music in the background.

Yet despite the sophistication and elegance of the Villa Padierna, where Mrs Obama will arrive with her nine-year-old daughter Sasha on Wednesday, Marbella's reputation does not make it an obvious destination for the First Lady.

Indeed, her decision to holiday on the Costa del Sol has been met with bemusement by some, who associate Marbella more with reality television stars, gangsters, corrupt politicians and wannabe WAGs than with the genuinely chic and classy Mrs Obama.

For fans of the resort, however, the arrival of the two Obamas is the culmination of a struggle to restore Marbella to its heyday in the 1960s, when the Kennedys rubbed shoulders with European aristocrats and Hollywood actresses.

"It's an honour to have her here," Ángeles Muñoz, a former GP turned mayor of Marbella, told The Sunday Telegraph. "She could have taken her holiday anywhere in the world, but she has chosen to come here."

Mrs Obama's arrival marks a new high point for Marbella. The town's problems really began in the early 1990s, with the election of Jesús Gil, president of Atlético Madrid, as mayor. The developer-turned-populist-politician ran Marbella for 10 years, doubling its size during a construction boom that was eventually his downfall. He was forced to resign after a property corruption scandal in 2002, and was then succeeded by Julián Muñoz, a former waiter famed for his relationship with the opera singer, Isabel Pantoja.

Mr Muñoz is in turn awaiting trial, accused of abusing planning permission - alongside his successor as mayor, folk singer Marisol Yagüe. Both deny the accusations against them.

Marbella's darkest hour came in April 2006 when, in an unprecedented purge, the entire town hall administration was summarily dismissed by the Madrid government. The kingpin behind much of the scandal, Juan Antonio Roca, who was chief of urban planning, has been imprisoned, convicted of mind-boggling levels of corruption, and is facing further charges this autumn.

Wads of crisp notes were found stashed in his homes, which were filled with vast collections of art, cars, helicopters, stuffed animals, thoroughbred horses and fighting bulls. One of his stud farms was guarded by a tiger. Spanish newspaper El Pais estimated his wealth at £1.7 billion.

The shady politics of the past decades was accompanied by the arrival of an equally undesirable cast of characters. Mafia-style shootings between rival Russia, Irish and British gangs became depressingly routine, and their brash and brutish friends, families and hangers-on moved into town and took over bars and beaches.

"When you have half a million tourists in the town over the summer, of course some of them are not going to be as desired," said José Luis Hernández, chief of the town's tourist board.

"But the idea that Marbella is this sleazy place is a myth. The town was being run by a band of delinquents from out of town – and now we, people who were born in the town or been here for years – are cleaning things up."

Mr Hernández, a lawyer who was born in Marbella, took over the tourist office in 2006 when the existing authority was swept away in the corruption scandal.

Since then he says they have been working to restore Marbella's reputation, advertising under the slogan: "Marbella: Make a wish."

Sitting on the Paseo Maritimo seafront, he pointed Marbella's attractions, including its climate, its restaurants - and the gleaming yachts in the marina.

The wealth upon which the town is built is nowhere more apparent than at the Marbella Club, an exclusive whitewashed hotel set around flower-filled courtyards with trickling fountains.

With rows of gleaming Ferraris parked outside, it attracts well-heeled customers looking for a slice of the classic Marbella chic – provided originally by the manager, Count Rudolf von Schönburg, known to everyone as Conde Rudi.

The Count, arriving in Marbella in December 1956, was one of the founders of the resort, and attracted royalty from across Europe as well as guests including Audrey Hepburn, Ava Gardner, Grace Kelly, the Kennedys and Rothschilds.

"Marbella has made great leaps in returning to its glory days," he told The Sunday Telegraph. "We worked so hard to put this place on the map, and then came the succession of negative things that damaged the reputation. Now it's back to where it was. Marbella is a paradise on earth."

Certainly the resort has not lost its power to attract affluent clientele. Last week Lakshmi Mittal and the royal family of Saudi Arabia were visiting, while Fabio Capello was playing golf on one of the town's celebrated greens.

Up on the hills above Marbella, the Villa Padierna - whose rooms cost up to €5,000 (£4,150) a night - is awaiting more than just Mrs Obama, whose entourage are reported to have booked 30 rooms. Antonio Banderas, Eva Longoria and Boris Becker are also due to attend a charity gala. One lunchtime last week, Cilla Black sat, glass of champagne in hand, laughing with her friends.

The hotel's director, Rivero Delgado, described the Italian-style residence as "an oasis of tranquillity".

And for all Marbella's self-improvement, the First Lady may still be advised to avoid descending from her hill-top oasis to the streets of the city below.

As night falls, less classy crowds take to the seafront walkways: gaggles of girls teetering on towering stilettoes as they sashay past groups of young men with slicked back hair and tight jeans. Lobster-pink families in baseball caps sit out at the beachside bars by day, feasting on fish and chips.

Beneath the billboards and high-rise tower blocks, touts prowl the beach selling fake designer handbags. Marbella may be emerging from its dark cloud, but it is not yet quite paradise.