While it's true the big clubs charge between 20E and 50E for entry, then at least 10E for a (very small) bottle of beer once inside, it has led to a bit of a myth that the whole island is expensive.
I'm not experienced enough with the island to offer any specific suggestions of bars, but there's loads of places that compete comfortably with the UK in terms of drinks prices, loads of places even cheaper than your average bar/pub in the UK.
Of course, I'm sure you can find bars selling bottles of champagne for hundreds of euros, but if you sniff around the west end (which is no where near as bad as people make out) there's plenty of very good offers on everything from beer to cocktails.
Another top tip - While I love the sunset bars and will happily give them my hard earned cash, it is true they can be on the pricey side due to the location. If money is an issue, grab some beers from the supermarket (dirt cheap) and sit on the rocks to watch the sunset, loads of people do this.
