It's hard to imagine any more prestigious setting for a restaurant than Queen Victoria's former chapel, overlooking the beautiful landscape of Osborne House. With this in mind, Matt and Cat explored the superb gardens at Osborne one sunny afternoon, building up an appetite for lunch at The Terrace Restaurant.

Visitors to the Empress's former summer residence now have a choice of dining experiences, and a choice of prices: from the homely tearoom at Swiss Cottage; the pleasant new cafe in the Petty Officers Quarters; or, at the top of the tree in both luxury and cost, the Terrace. To be taken into account in the cost calculations here must also be the £5.90 per head that it costs to get into the grounds of the house - although visitors can enter the cafe for free, the other two establishments require a ticket to be purchased for non-members.

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Matt and Cat waited in the beautifully-manicured terraced garden until one of the smartly-uniformed and very polite staff came out of the restaurant to greet them. They chose to sit indoors, although the outdoor terrace itself looked inviting, with spectacular views of distant Portsmouth beyond little white boats dotting the blue Solent. Entering the main Victoria Hall, your reviewers found themselves in a most sophisticated restaurant environment. The spectacular former chapel was beautifully presented, with fresh flowers, plenty of white linen, well-spaced tables and comfortable chairs. As they pondered the menu, a complementary jug of iced water was brought to the table. All very impressive.

The menu was full of tempting dishes. As this establishment does not open in the evening the menu is oriented towards lunches. Rather than starters and main courses, it is divided up into 'Small plates', 'Cold plates' and 'Hot plates'. Cat was immediately attracted to the ambiguously-named Chargrilled red peppers with local ash-rolled goats' cheese, which seemed to suffer from a clamour of adjectives. Was only the ash local? Was it the goats that were rolled in it - and why? No matter - it sounded delicious. Matt pondered a while longer - so many of the dishes seemed tempting. Passing up with some difficulty the Sticky home-baked ham he eventually chose Osborne-rarebit topped field mushrooms with crispy bacon.

After a suitable interval, during which M & C admired further the magnificent setting, and watched the distant yachts tacking across the water, the meals arrived. Both were well-presented if simple, eschewing the garnish, dusting of herbs or drizzle of coloured sauce that so often decorates food with pretensions. It was also noticeable at this stage that the meals were not going to be large ones. Cat observed that if her salad had been any the less, it might have passed for a garnish. Matt fatalistically calculated that his splendid Osborne-rarebit was going to set him back about £3 per mushroom - or perhaps £1 per mouthful. As there was no sign of any accompanying vegetables, bread or other side dish (although the menu did offer these at extra cost) the hungry diners banished such negative thoughts and set to.

Matt's rarebit proved to be quite excellent. The piquant cheese sauce was piping hot, and the whole thing was clearly freshly cooked on the large mushrooms. A portion of bacon topped the dish and, if not quite crispy, was certainly well-done. The three mushrooms were balanced on a small but very pleasantly tangy bed of rocket salad.

Cat's peppers were similarly enjoyable. There was no sign of any ash, and the goats' cheese proved to be stuffed into the bodies of the deliciously moist and tender peppers, which were served with a tasty basil oil and green leaf salad.

Forgoing the alluring desserts for the sake of their wallets, Matt and Cat asked for the bill which was brought promptly (no unnecessary waiting around here), and made their way back out into the delightful landscape of the late Queen's estate to reflect on the excellent food they had just enjoyed. The Terrace was certainly one of the most impressive eateries they have so far reviewed. In terms of location, it would probably be impossible to trump this one on the Island. The restaurant has been most tastefully and cleverly integrated into the historic house and garden, oozing style and sophistication without at any time setting aside the context of this most Victorian of venues. The service, similarly, was second to none, belying the fact that this is one of the busiest tourist destinations in the country. The downsides were the cost, and the size of the portions. It was not outrageously expensive, but should not have been as this was a lunch and not a main meal. If you then take into account the cost of actually getting into the place, and the meagre rations, the value for money does seem to be a little wanting.

Visit the website: http://www.english-heritage.org.uk/osborne