If you want a really cheap hotel on Mykonos, try the Drafaki Hotel. www.drafaki.com. It's an old family-run hotel on the outskirts of Mykonos Town, but right outside the hotel is a bus stop on the route to Paradise Beach.

Mykonos Town is where all the action is and you may get cheap apartments there if you search the net. The beaches are all out of town and you get there either by bus or by water taxi.

Mykonos is an expensive island - the tavernas in town charge top rates for food, the bars are "trendy" with "trendy" prices. You can buy snack food from outlets (kebabs, crepes, etc). but it is difficult to do Mykonos on the cheap. There are a few locals bars which you could chance if you feel up for it! My recommendation is save up more spending money than you think you will need!

For budget accommodation, look at Flora, Dinas Rooms, Akrotiraki Hotel, but these are really budget accommodation in town...

thanks all, sorry I should have been more clear I meant £250 per person, we ended up booking aeolos hotel, reviews are great so fingers crossed it is nice! Glad there is a good mix of night-life - can't wait now! Any recommendations on bars and restaurants gratefully received!

Lots of restaurant and bar info at this link from the "Top Questions about Mykonos" box on the Mykonos forum page: tripadvisor.com/ShowTopic-g189430-i401-k5465…