Thanks everybody for the replies and tips. We're back from Iceland now and had a fantastic time. I did book the Golden Circle tour and Blue Lagoon with the Gray Line in the end, which provided an excellent and punctual service. We did both in the same day, because I checked the weather forecast and found that Thursday was the only day with no rain and mostly sunny. They picked us up from the hotel at 8.30 in the morning for the Blue Lagoon and we had two hours at the lagoon, which was just about right. They picked us up from there at 12:00 and took us to the coach for the Golden Circle tour, which was an excellent tour - we highly recommend both! Our guide, Didi, for the Golden Circle tour was great - she told us about the sites we visited (Gullfoss waterfalls, the Geysir, and the Pingvellir National Park, where you can stand right on the Euroasian and American plates), but she also told so much about Iceland, including the history, the way of life, the peculiarities of the people and in such a funny way - she's amazing and funny. We saw the Northern Lights in the last night, which was our second chance to see it - dress warm for this one, as it's in the middle of the night and very cold, but well worth the effort! We stayed in the excellent Icelandair Hotel Natura and we didn't hire a car, as we like walking and the hotel was only 2 kilometers from the city center and 10 minutes from a lovely woodland walk to the Perlan, where you have amazing views of the city and can eat at the cafe or restaurant on the top of the building. There was also a bus stop right across from the hotel, which was free to hotel customers. My older daughter went out to gigs for two evenings and loved the night life in Reykjavik, which is very safe too. We found very nice cafes where to eat for reasonable prices. We did splash out in a meal at the hotel restaurant one evening with live music. The meal cost around £30 per head, including drinks, but was so good and worth the expense. This is about the same you would pay in a good English restaurant anyway. It did rain heavily for one out of the 5 days we were there, so not bad! We thoroughly recommend a trip to Iceland - it is a beautiful country, with amazing unspoilt landscape, very clean and friendly.
