Profile: Torn between the party and the paper: Lord Hollick, Labour's man at the 'Mirror'

He has a short fuse, and resents the carping criticism and intrusive publicity that a man with fingers in so many tasty pies is bound to attract. But then he is fairly new to it. 'They never said these kind of things about Robert Maxwell,' Lord Hollick complained to friends when he heard of the barbed questions being asked about his motives at the Daily Mirror. 'So why are they getting at me?'

Any comparison between the two men wounds Clive Hollick and in most ways is ludicrously inappropriate. Maxwell was gross, dishonest and bombastic, where the slight, bearded Hollick is meticulous and self-effacing.

He is a millionaire businessman who supports the Labour Party - a rare enough combination. And he has power over Mirror Group Newspapers, that totem of the Labour movement still owned by the administrators of Maxwell's estate. It was he who engineered the appointment of the abrasive David Montgomery as chief executive last October, at the same time that Hollick himself joined the board. This week, relations between the two former allies became strained. Montgomery, once a trusted editor for the right- wing Rupert Murdoch, provoked the resignation of Alastair Campbell, the Daily Mirror's political editor, whose strong personal links with Labour symbolised the paper's traditional allegiance.

In the wake of his departure senior Labour figures, from John Smith down, issued statements that they feared for the future of that allegiance. Montgomery's actions were censured by 150 MPs in a strongly worded Commons motion tabled on Wednesday. The former leader Neil Kinnock wrote a powerful defence of Campbell in the Evening Standard. Press reports yesterday suggested that Montgomery's job was in jeopardy.

All this has presented the 47-year-old Hollick with a conflict of loyalties. A Labour supporter from way back, he was made a life peer in 1991 on the recommendation of Mr Kinnock. For the past seven years he has played an important role in reshaping Labour's economic policy to render it more palatable to the City. A man who has devoted time and money to making the Labour Party electable does not want to be seen as sabotaging its only voice in the popular press.

Montgomery's initial stable-cleansing had Hollick's wholehearted support. When the pair arrived, the Mirror newspapers constituted Fleet Street's last bastion of extravagant editorial practices, symbolised by the office drinks cabinet and the interminable break for lunch.

That style of working is anathema both to Hollick and Montgomery, lean men with a ferocious contempt for corporate waste and flab. Office drinking was banned from the day they took over - Hollick drinks little. The executive lift and executive dining room were thrown open to the workers: he is impatient with the panoply of corporate privilege.

Those were the gestures. Within days came the reality, when 100 technically 'casual' workers (including many who were in effect full-time) were dismissed.

Montgomery was the front man, but Hollick's fingerprints were all over this new workplace puritanism. 'He's one of the great cutters of overheads,' says a former associate. 'He's obsessed with keeping costs down. That's how he's survived the recession. He doesn't like spending. He doesn't like smart receptions or smart offices for himself or his staff.'

From modest offices in Southwark he has used those principles to construct, over the last 19 years, the profitable financial services group MAI plc, now one of Europe's 500 largest companies. It rose from the ashes of J H Vavasseur, a conglomerate that he rescued from collapse at the beginning of 1974.

Then a 28-year-old finance expert with the merchant bank Hambros, he spent Christmas Day of 1973 drawing up a survival plan for the bankrupt Vavasseur. A week later, on New Year's Day, he was called to the Bank of England and asked to take personal control of the ailing group. 'I've never even run a fish and chip shop,' he warned Bank executives modestly. Despite that gap in his CV, he set the company on course to profitability by offloading extraneous businesses and sharpening its focus. He renamed it MAI - the initials of one of its subsidiaries, the outdoor advertising firm Mills & Allen International.

Already he had come a long way for the son of a french polisher in Southampton. He was educated at the local grammar school, and joined the Labour Party at 15, motivated in part by his reliance on the NHS to help him over a childhood bout of tuberculosis. 'He became deeply convinced of the need for universal public provision,' says a friend.

He went to Nottingham University and gained a degree in politics, psychology and sociology. His leisure interests there focused chiefly on the arts and media - areas in which many of his circle of friends went on to work. One of them was Simon Albury, a television producer, who was to exert a profound influence at important moments later in his life.

Through Albury he met and married Sue Woodford, a producer at Granada. They have three daughters and two houses - one in London's Notting Hill, the other in Fordingbridge in the New Forest, where he keeps his slender shape by riding and playing tennis. In the winter they ski in the French Alps.

In 1986, through Albury's brother Robert, Hollick launched the venture that was to give him his entry into the Labour Party's highest echelons. Robert Albury is a friend of John (now Lord) Eatwell, a key economic adviser to the Labour leadership. Robert Albury introduced Hollick to Eatwell to discuss setting up a centre-left think-tank modelled on the right- wing Adam Smith Institute and similar bodies in the United States. The outcome was the Institute for Public Policy Research (IPPR), which has exerted a powerful influence on Labour policy, especially on its move away from a doctrinaire approach to public ownership.

Eatwell introduced Hollick to Kinnock, who valued his City insider's advice on economics. They met and spoke often in the months leading up to last year's election. Now Hollick has a comparable relationship with John Smith and the shadow Chancellor, Gordon Brown.

'Having a financial background, he's dry in his economics,' says an IPPR staff member. 'For instance, once the decision had been taken to privatise British Telecom, he was in favour of breaking it down and creating real competition.'

Hollick was treasurer of the institute for its first three years and remains a trustee. If Labour were to win the next election he would be sure to exert a powerful influence, but friends say he would not seek a ministerial appointment. He prefers to operate in the shadows of power.

Last year, though, he learnt that in the harshly lit world of politics that is seldom possible. Just before the election he was stung by an attack in the Mail on Sunday, which reported that some brokers at an MAI subsidiary were being paid in gold bars via a Jersey bank, apparently to avoid national insurance contributions. The paper also alleged that Hollick was involved in a petty dispute with a Hampshire neighbour, a farmer: Hollick was said to be opposing his plan to build two new cowsheds, because of the smell. It was Hollick's first direct taste of the pre- election smear, and he took it badly.

A move into television resulted from another initiative by Simon Albury, who asked him to raise money to bid for the ITV franchise then held by TVS and based in Hollick's native Southampton. The new company, Meridian, in which MAI is the majority shareholder, won the franchise with a bid of pounds 36.5m.

Guests at the new station's launch party last New Year's Eve found it hard to believe that this bearded, casual, flip and youthful-looking man was really the financial brain behind it. He gave a cursory speech before melting back into the crowd and his favoured anonymity. Few knew that he had spent the best part of that day in a down-to-the-wire negotiation with ITN over the supply of national news to the station, beginning the following day. The argument was about whether the price to Meridian would be reduced if ITN's profits were to rise.

'I'm like Marks & Spencer,' he explained. 'I want to see my suppliers paid well, but I also want to see any cost savings they make passed on to the customers.' The ITN negotiators were outclassed.

With a television station under his belt, Hollick set his sights on the press, in particular the Mirror group. His first shot across its bows was fired a month before Maxwell died, at the Labour Party's Brighton conference in October 1991. Joe Haines, a Daily Mirror columnist and board member, was approached by another Labour peer and told that Hollick would like to talk to him about a possible bid for the group, whose share price had slumped as Maxwell's parlous financial position became clear. Haines thought it improper to discuss the matter.

After Maxwell's death, Hollick, who was prevented by cross-ownership rules from holding a majority stake in both a television franchise and a national newspaper, took part in a consortium seeking to buy the group. At that stage, with the share price still depressed, the administrators would not sell.

By then Hollick had become associated with David Montgomery in an abortive satellite television venture. When the administrators asked Hollick to join the Mirror group board and find a new management team in preparation for floating the Maxwell shareholding, he made Montgomery chief executive.

This week's ructions at the Mirror have shaken Hollick. Some say he may now be in a mood to quit the board altogether. This would not prevent him bidding for a stake when the Maxwell shares are floated. If he stays and decides on a showdown with Montgomery, expect him to emerge victorious. 'In the City,' says an insider, 'we have a saying: the only way to deal with Clive is to be on his side, because the other side doesn't stand a cat in hell's chance.'