Saturday Story: The little man from nowhere who made it ever so big

Bernie Ecclestone has caused the Labour government its biggest headache to date. Yet few outside motor racing really know him because his passion for wheeling and dealing is cloaked in obsessive secrecy. Behind the intrigue is a tale of extraordinary ruthlessness

No one seems very clear about exactly how much money Bernie Ecclestone has given to the Labour Party (or for that matter to the Conservatives) in recent times. The fact is not surprising. No one seems very clear about anything relating to the pugnacious little man who began life, it is said, as a gas fitter, and has made himself the world's highest paid executive, transforming Formula One motor-racing in the process into the world's biggest sport after football.

Admittedly much has been written about him. About his Lear Jet, his sumptuous homes in Chelsea and Gstaad and his glass-palace office (with indoor swimming pool surrounded by Astroturf) overlooking Hyde Park. About his 6ft 2in former model wife, Slavica, who is almost 30 years his junior as well as 11 inches taller, and who, for tax reasons, owns 80 per cent of his businesses. About the pounds 29.7m he earned in 1994, the largest year's salary ever recorded in Britain. And about his socialising with rock stars such as Chris de Burgh and leading politicians such as Kenneth Clarke. Not to mention his entertainment of Tony Blair and sons, who were whisked round Silverstone by no less a chauffeur than Damon Hill.

And yet, in spite of all the newspaper articles, a cloud of secrecy hangs around how exactly how he made his vast fortune. No one even seems sure of his origins. His father is variously described as a trawler-skipper, and an engineer. He is reported as having been born in Suffolk - and in Kent. His early money is said to have been made from a motorcycle business, but also from car auctions and from property deals.

What is beyond doubt is the change he has wrought in motor-racing. Thirty years ago Grand Prix cars were bolted together in lock-up garages and driven by gentlemen amateurs or Latin daredevils. Team managers such as Frank Williams were so strapped for cash that he was once forced to conduct his affairs from a public telephone box. Today the sport is a $1bn a year industry, regularly watched in more than 200 countries with 27,000 hours of Grand Prix television attracting a global audience of 45 million.

Bernie Ecclestone controls it all. He is president of the Formula One Constructors' Association (FOCA) which represents the teams. He is vice- president of the Federation Internationale de l'Automobile (FIA) the sport's governing body. His companies include Formula One Promotions and Administrations (FOPA) which strikes the deals with the circuits and which alone has made him pounds 30m over the past three years. Other companies - in which he also owns 99 per cent of the shares - control packages for TV stations and ringside hospitality. "Bernie runs the sport like his personal fiefdom," said one Formula One insider. "He even controls the parking bays."

His business empire is based at the historic Battle of Britain aerodrome, Biggin Hill. There FOPA makes the electronic gadgetry used to produce the exhilarating on-board television pictures of Grand Prix races. But his money is earned working 16-hour days behind the tinted windows of the long, sleek, grey executive coach known as Bernie's Bus which dominates the paddock at every Grand Prix circuit. It is there that an endless stream of drivers, agents, team proprietors and circuit managers conduct the unending succession of deals which are Ecclestone's meat and drink. His appetite for deals - always conducted in deadly secret - is formidable.

He has made enemies on the way. Environmental protesters in Australia, he claims, once threatened to shoot him, and the sport is consumed with apocryphal tales about the unhappy fate of those who crossed Bernie. But he has made friends too. The huge amount of money he has brought into the sport, transforming obscure engineers into multi-millionaire managing directors of race teams, produces an intense loyalty. None of them will say anything in public against him. Formula One is like a secret society, and Bernie Ecclestone is its godfather, albeit one who now craves the respectability of the knighthood he hopes his political donations will one day buy him.

Ecclestone began in motor-racing by driving Formula Three 500cc single- seater cars against drivers like Stirling Moss. But an accident in 1951 put an end to his ambitions behind the wheel and he turned to management. In 1958 he bought the Connaught Formula One team and later the troubled Brabham team which included stars like Graham Hill, Niki Lauda and Nelson Piquet.

As a team proprietor he got a seat on FOCA where the old-style racing impresario Lord Hesketh recalls him entering like a whirlwind. Until then the sport had been controlled by the race organisers who negotiated with driving teams individually. Ecclestone persuaded the teams to negotiate together and within a few years the whip hand had passed from the circuits to him. (How the increased fees were divided between him and the teams was, and is, a closely guarded secret.) More recently Ecclestone has taken to asking fees which the organisers cannot raise, whereupon his company FOPA takes over as promoter - a strategy which earned him pounds 16m in 1994 alone.

Next he tried to persuade the teams to set up a company to take over trackside advertising. When they said no he encouraged Paddy McNally, the sometime squire of the Duchess of York, Sarah Ferguson, to set up a business. The relationship between the two men remains, like so much in Ecclestone's life, mysterious. But Bernie openly lobbies for McNally's company which earns more than pounds 4m a year.

After that came a firm to sell corporate hospitality in luxury lobster and champagne marquees in the paddocks behind the pits where firms pay pounds 1,000 a head for their guests to rub shoulders with the grimy and the glamorous.

But it was his deal in the mid-Eighties with the European Broadcast Union which was the clincher. It represents all major European TV stations with a combined audience of 375 million. To get permission to cover their local Grand Prix every station had to guarantee to broadcast all the races - and live. As soon as that happened sponsorship flooded in and Formula One cars became the fastest cigarette packets in the world. Marlboro now pays McLaren more than $35m a year and Ferrari around $20m. Rothmans, Mild Seven and Benson & Hedges all contribute towards an industry total of $160m a year.

From there on it was just a question of upping the ante. Ecclestone switched Formula One from BBC1 - which was paying pounds 7m - to ITV, which offered 10 times as much. In 1993 he did a secret deal with Max Mosley, the president of the FIA which owns the Grand Prix television rights, to allow Ecclestone to administer them for the next 25 years - and for himself rather than the teams. He moved into discussions with Rupert Murdoch aimed at expanding satellite TV coverage of the increasingly popular sport with the advent of digital pay-TV next year. He has invested more than pounds 30m of his own money in the digital revolution - a move which, he told the racing journalist Martin Jacques in an interview in Esquire last year, he expects to yield more than pounds 600m within five years. Such projections led him to explore the possibility of floating Formula One on the stock exchange, a move which his advisers Salomon Brothers suggest could yield pounds 1.5bn.

All of this has raised eyebrows as well as cash. The deal with Mosley has attracted the attention of the European Commission. In 1983 - when the FIA was still a rival to Ecclestone - he persuaded its then president, Jean-Marie Balestre, to give a job to a Bernie sidekick Max Mosley, the son of the fascist leader Sir Oswald Mosley. When Balestre eventually confided in Mosley about what a problem Ecclestone was Mosley suggested that the best way to neutralise Ecclestone was to co-opt him as FIA vice- president. Shortly after Mosley stood against Balestre and ousted him as president. The TV deal followed.

But there were three obstacles to Ecclestone's money-printing flotation. The first was a row within the industry. The division of the television cash had traditionally been governed by something called the Concorde Agreement. But three teams - Williams, McLaren and Tyrrell - have been refusing to sign the latest version. Where they had not been in a strong position with Ecclestone in the past, the flotation, originally planned to coincide with the British Grand Prix in July, gave the teams a valuable lever in negotiations. Last week industry insiders were saying that Bernie the Bargainer was now close to a deal with the three rebel teams.

The second stumbling block for the flotation plans was political. A threat by the European Union to outlaw sports sponsorship by tobacco companies was being blocked by Germany, Holland, Greece and the UK. They constituted an EU veto. But if one country changed its mind the veto would crumble. The manifesto promise of New Labour threatened to bring that about - until the generous political donor Ecclestone, aided by the FIA director-general, David Ward (a former adviser to the late Labour leader John Smith), managed to persuade the new government to change its mind and exempt Formula One in circumstances which have produced the biggest controversy yet faced by Tony Blair.

Only the third obstacle remains. Karel Van Miert, the EU competition commissioner, is said to believe that excessively long exclusive contracts - such as the 25-year TV deal - are anti-competitive. Doubtless Bernie Ecclestone is working on him even now.