Why I detest democracy, why I gave Labour £1m - and what my wife said when I asked for a mistress, by Bernie Ecclestone

Bernie Ecclestone does not look amused with my opening gambit. "So, tell me, are you a hobbit?" The chief of Formula One - and Britain's tenth richest man - Ecclestone has recently been attacked by residents of the Swiss ski resort of Gstaad after he raised the price of drinks in the town's Olden Hotel, which he owns.

The local newspaper compared him to the 18,000-year-old Indonesian hobbit found by anthropologists in 2004.

To be fair, he is very short: just 5ft 3in. He has other hobbit-like features; a round face, slightly pointed ears and shaggy hair. He is sitting in an eye-achingly red chair in his Kensington office and is wearing trousers that resemble long-johns.

"Well," I persist. "Are you descended from an 18,000-year-old hobbit?"

I wonder what his reaction will be and if he will ask me to leave. Ecclestone, 77, has been variously described as a "dictator" and an "evil genius".

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The long and short of it: Bernie and wife Slavica

In 1997, he became the subject of the first Blair financial scandal, after giving £1 million to Labour. The donation was returned amid huge controversy when the government subsequently exempted Formula One racing from a ban on tobacco advertising. The media called it "Cash for Fags".

Ecclestone seldom gives interviews. After the uncomfortable silence of a man who wishes he had stuck to this policy, he suddenly grins, lighting up his parchment-pale face.

"The truth is I didn't know what a hobbit was," he says in a staccato, rata-tat voice.

"I'm very ignorant, so I had to look it up. Then I realised I was definitely a hobbit because they are minuscule and brilliant, and so am I!" He laughs, making a sound similar to that of a machine gun.

Ecclestone never knowingly undersells himself. When I mention accusations that he put up prices at his Gstaad hostelry to keep out undesirable locals, including farmers, who were a touch too bucolic for his billionaire tastes, he is haughty.

"I don't know what the price of drinks are in my hotel, because I never buy any. I make it a policy never to give anything away. In any case, I don't go into town. I hide out in my house nearby with my wife."

Ecclestone has been married for 25 years to the former model, Croatian-born Slavica Radic. (He pronounces her name as if it were "saliva".) She has black hair, a wicked smile and is 6ft 2in tall. In photographs of the couple, Ecclestone looks as if he is nesting in her pocket.

"Slavica likes parties and stays out in Gstaad longer than I do. I don't like that sort of thing. The worst thing you could do to me would be to send me on holiday. Doing nothing would kill me."

Despite his age and a heart bypass operation six years ago, Ecclestone has no plans to relax his hold over Formula One. As president of Formula One Management and Formula One Administration, he remains the primary force in motor racing.

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Model daughter: Tamara, 23, is a TV presenter and lives with the family in Chelsea

The teams and manufacturers may have a little more power than when Bernie, a former car dealer, created the Formula One Constructors' Association in 1972, but he still retains the commercial rights to the sport.

"How does it feel to effectively own a whole sport?" I ask. "You are the sort of Napoleon of car racing."

He sighs theatrically. "In the old days it was easier to be dictatorial. But now in Formula One we have more of a democracy" - the word is expectorated like chewing tobacco.

Then he gives me a sly, sidelong look, which seems to imply that other people's opinions are something of which he takes scant notice.

"I hate democracy as a political system," Ecclestone continues. "It stops you getting things done. I think people should have decisions made for them."

As for some of the less palatable aspects of dictatorship, he remarks casually that "torture is just an old-fashioned way of getting things done".

With views like these, Ecclestone is probably wise to avoid interviews. But he charges on.

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Attack: Bernie was compared to a hobbit after raising the price of drinks at his Olden Hotel

"A good dictator is better for a country than a democracy. Democracy in Britain leads to confusion and bad compromises. In a democracy, the Prime Minister is always influenced by someone or some group or the Press. I myself have never voted. What's the point?"

I ask him about his controversial donation to Labour. Ecclestone has refused to speak about this since the original furore and he doesn't reply to my question.

I persist. "Bernie, when you gave £1million to Labour it was thought you were trying to get Tony Blair to allow tobacco companies to continue to sponsor Formula One."

His eyes grow opaque. "I don't care what people thought," he says.

"Was it a bribe to get Blair to change the ruling on tobacco advertising?"

Eventually he answers: "I don't approve of smoking, so why would I encourage it?" I look at him incredulously and suggest: "Because the sponsorship of tobacco companies was very important to Formula One."

I then point out that if he doesn't vote for either Labour or the Tories, why didn't he donate £1million to the Conservatives as well?

He ponders this. "I didn't give money to the Tories because I thought they might not give it back."

"What?! You only gave money to Labour because you thought they would give it back?"

He shifts in his chair, looking as though he might make a dash for the door. "Yeah. They were very nice about returning it."

I say our dialogue is becoming the conversational equivalent of the Mad Hatter's Tea Party. Does he imagine that just because he is worth £4billion, I will accept this shameless sophistry?

Ecclestone leans forwards. "Well, I do think Blair was bullied into giving it back. I don't think it was totally voluntary."

"No", I retort dryly, "political parties don't usually hand back £1 million voluntarily. Blair gave it back because he didn't like the accusations of Cash for Fags and you know that."

"At least it wasn't cash for honours!" he declares.

And that is as much as he will say. Not surprising for a man who - despite being 77 - still enjoys a corporate reputation for bullying and intimidation. "Me? A bully? At my height?" he protests, his small hands, which smell of Lux soap, flailing.

I point out that through history ruthlessness has been common among short men.

"Well, it's true that small people normally try to compensate by being over-bearing. You have to stand up for yourself as a kid in school and that goes on through life."

"Do short men have larger brains?" "If you are an average hobbit you need to be a little bit smarter to stay alive," he responds.

Ecclestone is the son of a North Sea trawler man. He left school at 16 to work at the local gasworks and pursue his hobby of motorcycles.

After running a car and motorcycle company in Bexleyheath, South-East London, he started racing cars in Formula Three events. After a series of accidents, he managed champion driver Stuart Lewis-Evans, who was killed in the 1958 Moroccan Grand Prix after his engine exploded.

"Living on the edge made the drivers of the past interesting people." He clearly thinks today's stars are too clean-cut.

"Now, Michael Schumacher and Lewis Hamilton feel they have to keep up appearances for the sponsors.

Everything has changed, hasn't it? Racing has become one of the last well-behaved sports."

He asks me if I know what is really wrong with Formula One? Before I can reply, he declares: "There are not enough sex scandals."

I have a feeling that Ecclestone has become slightly bored with the daily grind of motor racing. He says he doesn't even like cars anymore.

"I don't run a Ferrari or anything. I have a Lexus." He adds that his wife always complains about his driving.

"She moans all the time. She doesn't think I should have a licence - me a Formula One man! The trouble is, she is a back-seat driver and she says I go too fast."

He met Slavica in Italy when she was modelling for Armani. She is 28 years his junior and looks like a genetic hybrid of actress Ava Gardner and Morticia Addams, the gothic matriarch of TV's The Addams Family. Was it her youth or her height that he found alluring?

"I liked her because she was attractive and younger. I didn't want anyone older. I didn't see much point in that."

Ecclestone, to his credit, is no ageing playboy. There have, however, been rumours that the Ecclestone marriage is tempestuous. He makes another lop-sided attempt at a smile, showing uneven teeth that look as if he grinds them in his sleep.

"Slavica is from Croatia. These people have more character and passion. Slavica is a good wife and mother and a bit mad. If she is upset with you, she lets you know about it."

He suddenly barks: "Why do you think people are faithful?"

"Because they like each other?" I suggest.

He looks at me pityingly. "It's only because of fear. Fear of the financial disaster of a divorce. I asked Slavica about the possibility of me having a mistress, but she didn't like the idea of that, so I gave it up. It would have been nothing but trouble."

Are you serious? "Yes," he says, unsuccessfully attempting to appear guileless.

He and Slavica have two daughters, Tamara, 23, a model and TV presenter, and Petra, 18. The family's main residence is a mansion in Chelsea, then there is the house in Gstaad, a yacht and two private jets.There was a house in Sardinia, but Ecclestone sold it.

"I got rid of it because they were kidnapping rich people. I was worried, as I knew if I got kidnapped my wife wouldn't pay to get me back! So I thought we'd better leave." He succeeds in making himself laugh so hard I think he will fall off his chair.

What does he want from life? Wealth? He has that. Fame? He is recognised on the street. "I do catch the imagination. Here comes the hobbit with the Beatle haircut!"

Respect? "Look, if stuck-up people in Gstaad and elsewhere don't like me, I don't care. I come from a line of 18,000-year-old hobbits."

An honour, then? Why isn't he Sir Bernie? It would seem I have touched a raw nerve. He snaps: "Because unlike Mick Jagger and people I have never taken drugs and, unlike Sean Connery, I pay all my taxes in Britain. Anyway, I don't give a damn."

I have heard a story that he was offered a CBE some time ago and turned it down because he felt it was not important enough. Then, when influential friends lobbied Buckingham Palace in an attempt to get him a knighthood, the Palace brusquely refused. He listens to this in silence.

"I don't give a damn!" he repeats unconvincingly, refusing to be drawn.

As I get up to leave, I notice a stack of banknotes cast in bronze. "Is that the money from the Labour Party? Can I have some?"

"No, it isn't. And as I said, I never give anything away," he quips.

And with that, I am shown politely to the door.