In an otherwise unremarkable stretch of downtown Mittagong, you have a choice of Chinese (House of Lowe), Vietnamese (Orange), Indian (Shiva) and Thai (Paste).

Only one of the above, however, is run by a Michelin-starred chef who was named best female chef in Asia at the 2018 Asia's 50 Best Awards. Only one sends out food on Marc Newson by Noritake bone china. And only one is in the running for the restaurant opening of the year.

Paste is the third and latest offering from the team behind Paste Bangkok, which has held a Michelin star for the past three years (another is in Laos). For Thai-born head chef Bongkoch (Bee) Satongun and her Mittagong-born husband, chef Jason Bailey, it's a return to familiar territory, having opened their first restaurant here in 2001.

Since then, Satongun's cooking has evolved into an enticing blend of old and new, going beyond the usual green chicken curry, fish cakes and som tum to explore the old, forgotten recipes of private families throughout Thailand.

The menu doesn't run to Thai names across its snacks, curries, grills and "ancient salads", a nod to rural sensibilities, perhaps.

The high-ceilinged room has been kept crisp and clean, sparely decorated with abstract art and a cabinet displaying the Bangkok restaurant's treasured Michelin awards.

There are good smells coming out of the rear kitchen, and staff are happy to engage with diners, most of whom are on nodding acquaintance with each other.

"We'll have one of every entree," says the bloke on the next table. It's a good call. Deep-fried taro root balls ($17 for four) are stuffed with barbecue pork and mashed taro – much like yum cha's wu gok dumplings crossed with char siu bao – ready to dip into a bowl of sticky plum tea sauce.

Everybody's favourite tapioca dumplings ($18 for four) are filled with shredded smoked Snowy River trout and topped with crushed peanuts and coriander; squishy, nutty and moreish.

So far, so delicious, if not so surprising. Then along comes a salad in which every bite is an intriguing play of crunch, chilli, aromatics, salt and granulated sugar.

An interesting mix of cool, refreshing watermelon balls tossed with shredded salmon, fried shallots and powdered roast galangal topped with a ladleful of rich, oily salmon caviar ($22), it's a ringside seat to a circus of Thai flavours and techniques.

So is a deep, rich, thick slurry of a southern-style crab curry – more a sauce, really – chunky with hunks of juicy blue swimmer crab and strewn with crunchy coastal succulents and delicate white petals. Jasmine rice ($6) is particularly fragrant, and essential with another earthy curry of slow-braised beef cheeks with pickled garlic ($25).

It makes the locally produced 2017 Artemis pinot noir (excellent value at $11 a glass and $50 a bottle) feel right at home.

Sophisticated plating and fine glassware suggest sit-up-straight fine dining but, happily, dishes come grouped family-style for shared eating, which keeps things relaxed. Plump roasted duck ($32) is awash in citrusy juices like duck a l'orange, gently spiced with star anise and mah kwan, a Thai mountain pepper similar to Sichuan.

Coconut noodles ($18) make a textural dessert, the long, slippery lengths of lightly smoked coconut milk jelly sweet with palm sugar sabayon and chewy dried fruits.

Satongun calls her cooking "80 per cent tradition and 20 per cent creativity". She's not tearing anything down and reinventing it, but refining and layering with grace, freshness and balance.

This is really delicious food, and not kill-ya-dead spicy-hot, either, because it's more about flavour than chilli.

What you can taste is everything in it – the herbs, lemongrass, galangal, pork, crab, edible flowers, smokiness and sweet coconut – made the hard way, the old way, by hand. Downtown Mittagong, you are now officially destination dining.

The low-down

Paste

Address: 105 Main Street, Mittagong, 02 4872 2277, pasteaustralia.com

Open: Lunch Thu-Sat from noon; dinner Mon-Sat from 6pm. Booking online only, pasteaustralia.com

Dining window: Two hours

Takeaway: Full menu available

Protocols: Socially distanced tables, contactless payment

Vegetarian: Four vegetarian dishes

Drinks: Dedicated cocktail and mocktail list, Thai and local craft beers, and an accessible list of relevant wines, with a focus on Southern Highlands winery Artemis.

Cost: About $150 for two, plus drinks

Where's the score? While the industry works to get back on its feet, the practice of scoring reviews has been paused.