A tiny seaside town in France has become an unlikely revered place for ‘nakationers’, attracting as many as 40,000 nudists during the warmer months.

At Cap d’Agde’s naturist resort, nudity is mandatory and has become so popular that it has earned the nickname ‘Naked City’, reports stuff.co.nz.

The Village Naturiste is a fully functioning town, boasting the world’s only own nude bank, nude post office, nude hairdressers and nude supermarket.

Visitors pay a ‘naked tax’ of €8 (NZ$13.40) at the entrance, before stripping off and storing their clothes in a locker for the duration of their stay.

According to news.com.au, the town was founded by the olive-growing Oltra family in the 1960s, who realised people were flocking to their land to skinny dip and sunbathe in the nude.

They obtained an official ‘nude designation’ for their land, and set up the Oltra Club, which was frequented by nudist families from Germany and the Netherlands.

Some of the holidaymakers built houses nearby, and amenities were soon established to accommodate them.

While nudity is compulsory on the beach, the town dresses for dinner in the evening, when the temperature drops.

The town is family-friendly, and any lewd behaviour could land visitors in jail with a €15,000 fine (NZ$25,000).However, in recent years there have been complaints that the town is being overrun by voyeurs, libertines, and swingers.

In 2005, a family park and swimming pool were demolished and replaced with bars and nightclubs, including ‘boite echangiste’, or wife-swapping clubs.

The clubs were burned to the ground not long after, news.com.au reported.

While the crime remains unsolved, it is believed it was committed by ‘fundamentalist’ naturists who felt their lifestyle was under attack.