Gone are the days when dining in Prague meant gawping balefully at plates of stodgy dumplings.

The city’s restaurants are dynamic, and popular events such as May’s Food Festival (praguefoodfestival.com) and the Grand Restaurant Festival (grandrestaurant festival.cz) confirm it as a foodie destination.

Budget: Friendly Home Kitchen offers Czech-influenced home-style cooking in a café environment, serving breads and soups, £2.70, and mains such as duck breast and stuffed peppers. (homekitchen.cz)

Lehka Hlava offers good value, inventive veggie dishes in a colourful, quirky environment. The lunch special of soup and a main – such as red onion soup with peppers, and tofu burger in batter, vegetable couscous, roasted sweet potatoes, mango chutney dip and lettuce – costs just £3.80. The Mexican pinto salad, £5.10, and eggplant quesadillas, £4.80, are good too. (lehkahlava.cz)

Blowout: Head chef Jirí Stift has created a fantastic menu at the Mandarin Oriental hotel’s Essensia restaurant. Choose from a mix of beautifully presented Asian and Czech cuisine – try the weekend dim sum lunch, £35. (mandarinoriental.com)

Budget: The sister restaurant of Aromi in Vinohrady, La Finestra has the same rustic appeal and serves some of the best Italian food in the city. Try the grilled scallops with truffle potato purée and béarnaise sauce, £12.20, and slow cooked neck of pork with pear purée, prune sauce and potato fondant, £14. (lafinestra.cz)

Homely and affordable locals’ favourite Stoleti is run by a well -known Czech aristocrat. The food is simple yet inventive, such as spinach soufflé with horseradish sauce, £3.50, and Oskar Kokoschka – a turkey skewer with ham and apple horseradish, £5.30. (stoleti.cz)

Blowout: A slick interior and open kitchen set the scene for La Degustation. Go for the Dégustation Bohême Bourgeoise, £80: seven unforgettable courses based on recipes by 19th-century culinary star Marie B. Svobodová.(ladegustation.cz)

Budget: The dark and atmospheric cellar bar Blue Light has graffiti-decorated walls and an extensive cocktail list. Try Klín Zrzky, a heady mix of vodka, Malibu, amaretto, orange curaçao, lime juice and multivitamin-packed juice, £4.80. (bluelightbar.cz)

Beer lovers will adore the Prague Beer Museum, not a museum at all, but a pub offering a unique selection of Czech microbrews. There are over 30 different types served, from pale ales to honey wheat beers. Try the Rebel Cerný, a dark, slightly caramel tasting lager, 0.3 litre for 80p. (praguebeermuseum.com)

Blowout: Týnská Bar and Books is a spin-off from Bar and Books’ New York bars. Peerless cocktails and an extensive whisky list are served in a sumptuous, book-lined room. Try the rosemary and lychee champagne cocktail, £10.40. (barandbooks.cz)

Budget: Built in the 17th century, the delightful Dum u Velke Boty (House at the Big Boot) lies in one of prettiest squares in Malá Strana. It’s renowned for its friendliness, antique-filled bedrooms and generous breakfasts. Doubles from £95. (dumuvelkeboty.cz)

For a designer edge, try Maximilian, sister hotel to the Josef, Prague’s first boutique hotel. Designed by Czech architect Eva Jiricna, it has 71 modern rooms and an excellent spa. Five minutes from Old Town Square and a mere stroll from La Degustation (see dinner). Doubles from £89. (maximilianhotel.com)

Blowout: The Mandarin Oriental Prague is one of the city’s top hotels. A former monastery, it’s a mix of medieval architecture and modern luxury. It’s also home to Essensia (see lunch). Doubles from £218. (mandarinoriental.com)

Must do
Budget: Buy quality picnic ingredients such as quiche, sandwiches and tarts, from £2.50 from French-style deli Au Gourmand. Catch the funicular railway to the top of Petrin Hill, where you can enjoy your feast while looking over the Old Town. (augourmand.cz)

Farmers’ markets have been blooming since the launch of Prague’s first last year. Naplavka is held every Saturday (8am-2pm) next to Palackeho Bridge. Look out for local cheeses tvaroh (curd cheese) and bryndza (made from sheep milk), delicacies such as dried mushrooms from the Sumava forest and micro-beers.

Blowout: Spend a whole day at Prague Castle – the largest ancient castle in the world – viewing everything from St. Vitus Cathedral to the Lobkowicz Palace. The latter has a café and restaurant with panoramic views of the city. (lobkowiczevents.cz)

The article 'Budget and blowout guide to Prague' was published in partnership with BBC Olive magazine.