The walls are all lime green and glass, the clientele all lip gloss and tan, and the waiters' smiles a mixture of boredom and frosty charm. And it's here in Edinburgh's most upmarket store, Harvey Nichols - the home of ladies who lunch - where patrons can quench their thirst after a hard day's shopping with a bottle of the world's most hyped drink: Fiji Water, at just £2 a pop.

Fiji Water is sold as the epitome of chic, but there's a darker side to its ritzy image. The water racks up its carbon footprint by being transported to Scotland from half way across the globe, and its sexy uber-cool image is doing wonders for the country it hails from. Fiji after all is a nation ruled by one of the world's most repressive regimes.

The elected government of the Fiji islands in the South Pacific was overthrown by a military coup in 2006, led by the armed forces commander, Frank Bainimarama. His rule was declared illegal by the Fiji court of appeal in April this year, since when he has abolished the judiciary, banned public gatherings and delayed elections until 2014.

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In the circumstances, how Fiji Water has managed to maintain its image as the water celebrities like to be seen drinking is a marvel of the marketing age. But now, the cracks are beginning to show.

Fiji Water established its brand via a carefully co-ordinated series of product placements in trendy US TV shows, like The Sopranos, Desperate Housewives and 24. In the 1999 remake of the 1968 film The Thomas Crown Affair, a bottle was famously emptied over film star, Pierce Brosnan.

The company has sponsored the Emmy TV Awards and Justin Timberlake's Summer Love tour. Thousands of bottles of the water were given away at last year's US Democratic Convention, and even President Barack Obama's family was pictured sipping the stuff on election night. As a result Fiji Water has become the biggest selling imported water in the US, and is now rapidly expanding throughout Europe, Asia and Australia. The US-owned company behind the brand has persuaded millions in the developed world to pay way over the odds for a product they can usually get for free.

At Harvey Nichols, a bottle of Fiji Water costs 60% more than Evian water and 80% more than the shop's own brand. At the supermarket, Waitrose - where Fiji Water is also sold in Scotland - it retails at prices four to six times higher than competing brands.

Environmental groups say that importing bottled water to Scotland is "simply bonkers" when we can all access great water from our taps. "This is a prime example of an unnecessary luxury with an unacceptable cost to the planet," said Dr Richard Dixon, the director of the World Wildlife Fund Scotland. Bringing water 16,300km from Fiji is bad for the environment in terms of waste, packaging and transport, as well as being a total waste of money. It is particularly sad that this supposed epitome of cool helps prop up a repressive military dictatorship."

Earlier this year Anna Lenzer, a journalist with the radical US magazine, Mother Jones, investigating Fiji Water, was quizzed by Fijian police after sending emails from an internet cafe in the capital, Suva. She said she was threatened with imprisonment and rape before being encouraged to leave the country. She accused Fiji Water of refusing to criticise the manifold human rights abuses perpetrated by the military junta. "Its silence amounts to acquiescence," she said. "The regime clearly benefits from the company's global branding campaign characterising Fiji as a paradise' where there is no word for stress.' Fiji's tourism agencies use Fiji Water as props in their promotional campaigns."

Rights to the underground aquifer from which Fiji Water is drawn from in the remote Yaqara Valley were acquired by Canadian mining and property mogul, David Gilmour, in the early 1990s. In 2004 the business was bought by Lynda and Stewart Resnick, well-connected food and farming entrepreneurs from California.

The company, which employs 350 Fijians, has a long-standing arrangement under which it avoids paying any taxes in Fiji. But it stressed that it paid $1.3m royalties in 2008 in support of a string of local good causes, including schools, health care clinics and the provision of clean drinking water.

A company spokesman pointed out that the Resnicks bought the company when Fiji had a democratically elected government. "We cannot and will not speak for the government, but we will not back down from our commitment to the people, development, and communities of Fiji," he said.