You don't fool me, Lord Sugar. You're just a big teddy bear

As 'The Apprentice' returns to BBC1 for its eighth series this week, Sarah Morrison discovers that the multimillionaire host has a softer side

Lord Sugar with last year's Apprentice winner Tom Pellereau (Justin Sutcliffe)

From the moment I walk into Lord Sugar's boardroom, I sense that the camera is rolling. Why else would His Highness tell me I have "10 or 15 minutes" when I had been promised 30? Why would he keep checking his watch and playing with his phone rudely while I try to ask him questions? And why would he tell me he has "no time for small talk" just when the interview is about to start?

Within minutes, I realise exactly what he is up to. The camera is not on and the 64-year-old business tycoon, famous for his matter-of-fact growls and steely put-downs, is in his Essex-based office and not The Apprentice studios, but he is still in TV mode. The nervy atmosphere designed to make me think he could get up, walk out of the room and slam the door behind him at any minute is all part of the act. It is designed to conceal what perhaps few get to see: Lord Alan Michael Sugar, Baron of Clapton, is actually a bit of a softie.

Pretending I haven't noticed this, I agree to stick to the script. Lord Sugar and his sidekick Tom Pellereau, the 32-year-old winner of last year's The Apprentice, join me at the boardroom table made for 20. I bypass the fact that the office secretary was knitting at her desk as I walked in, and pretend, like them, that I am now in Lord Sugar's lair. Armed with their new business venture and Pellereau's invention, the Stylfile Collection, a range of curved nail files that go on sale in Sainsbury's today, the Lord plays out his well-practised role perfectly.

Asked if has ever argued with his newest business partner, Lord Sugar retorts: "Arguments are always one-way. I'm always right." Asked if they talk regularly, he almost spits: "I'm impatient, and have no time for small talk really. Business is business." But just as the PR woman looks nervously at her watch, and towards the door, I sense a crack in Lord Sugar's demeanour and go in for the killer question: "Do you spend much time with your grandkids, Lord Sugar?"

He eyes me warily and tries to bat me off. "They're brought around, and then you send them away," he says, not even fooling himself, by this point, with his charade. But then, leaning back, putting his phone down and looking me directly in the eyes, he tells me that he and his seven grandchildren, aged five to 18, "mainly just talk". Before I can interrupt with another question, he continues: "I just did a project with my grandson on electrical goods for him to present at school. It was on Michael Faraday. We built a couple of demonstrations for him – magnet moving a meter and a dynamo.

"I told him the teachers would assume that someone had done all this work for him. I needed to do quite a bit of coaching before I let him have it, because there's no point standing there like a couple of dummies with story boards showing this stuff unless they really understand what they're talking about," he continued, turning to me for approval, which I gave. "He's only eight or nine years old, and he got complimented by one of the teachers who said that he gave a presentation that some of the sixth-formers couldn't do." He looked up, with a smile in his eyes.

Call it his competitive streak, or pride, but after that, nothing Lord Sugar says is delivered with the same bite. In his autobiography, ironically titled, What You See Is What You Get, Sugar admits he "fell a long way short" as a father to his three children, Daniel, Simon and Louise. Now, as he tells me he wants to "invest in young people with bright ideas", it seems he is making up for lost time. Pellereau, who now rents a spot in Lord Sugar's grey and old-fashioned Amshold office, moved with his fiancée, Sarah, to Stratford, east London, recently so that he could be closer to his work, and his mentor.

Telling me, almost sickeningly, that "in life we only get few occasions to work near geniuses", Pellereau's look of pure adoration for Lord Sugar is made more palatable only by its authenticity. "I am a crazy adventurer coming up with things, while he's a hard realist, who tells me to get on with things and stop messing about," he says. When I ask the young Apprentice whom he most looks up to in business, Sugar jumps in, with a grin: "apart from me, you mean?"

Lord Sugar's rise to fame, a rags-to-riches tale, has been well told. The youngest of four children, he was brought up in a council flat in Hackney by his garment-worker father and his housewife mother. By the age of 12, he was boiling beetroots for his local grocer, and by the age of 16, when he left school, he was selling car aerials from the back of a van.

His former electronics company, Amstrad (Alan Michael Sugar Trading) – which he launched at the tender age of 21 and which is best known for bringing the personal computer to Britain – was floated on the stock market in 1980. By, the age of 40, Sugar was worth an estimated £600m, making him the 15th richest person in the UK. Amstrad, which now belongs wholly to BSkyB, has been a major supplier of set-top boxes for Sky, and Lord Sugar still insists that Rupert Murdoch is a "great businessman".

Despite insisting he "can't add anything" to what had been said about the phone-hacking scandal or "what has gone on in [Murdoch's] organisation", Lord Sugar resolutely adds: "He's still top of my list as far as admiration is concerned." A man also sitting high in Lord Sugar's expectations is Richard Branson, who Lord Sugar insists, like him, "started humble". He holds less respect for those who buy into the "fast buck culture", or for those who want to be "the next Mark Zuckerberg and make billions".

"Selling stuff online is well and good, but young people need to move away from this Friends Reunited, Google and Twitter-type crap, where people are aspiring to some online social network type thing. That era is gone. It's an American thing," says the man who, in 2005, predicted that the iPod would be dead within a year. Just as I thought I had lost him to his grisly role once again, he perks up. For him, the new series of The Apprentice, which starts on Wednesday, is an antithesis to this head-in-the-clouds culture, and demonstrates that "anyone can start with a small amount of money" and run a successful business.

"That's how a lot of great entrepreneurs have grown and a lot of great business people have started; people that you have never heard before, who employ five or 10 or 20 people, and make a nice living for themselves. That's how it should be." When asked what advice he would give to would-be entrepreneurs, he says: "They need to focus on how they can make their salary in the first week – that's a good starting point – and be self-sufficient, then go on to employ a second person and so forth. That's how trees grow."

The former Labour enterprise "tsar" holds little faith in the current Government to bring an about-turn to Britain's fortunes. And while he claims they do a "lot of talking", he does not find it hard to point the finger. "Take Vince Cable, for example, the Business Secretary who's never been in business," he laughs. "It's a bit like if you had a pain in your groin and someone said, 'I'm a doctor, would you let me operate on you and take your appendix out?' I don't think you would. I mean, he comes out with some stuff ...."

While Lord Sugar, worth an estimated £770m, tells me he still keeps in touch with "quite a few" former Apprentice contestants, particularly the winners, it is clear that it is his family that plays the most central role in his life. Married to Ann, his wife for almost 45 years, and with two of his sons working in his companies, the Sugar empire is a family mould. Yes, he is not one for airs and graces, and no, he doesn't say goodbye to me when he leaves, but I am not offended either; I know now he is just warming up, somewhat mischievously, for his next role.

Where the winners went

Series one, Tim Campbell

Worked for Amstrad for two years before stepping down to set up the Bright Ideas Trust, which helps young entrepreneurs.

Series two, Michelle Dewberry

Hired to investigate recycling projects but left within a year. Has launched numerous websites and remains the only contestant not to feature in Lord Sugar's autobiography.

Series three, Simon Ambrose

Spent three years in Lord Sugar's property division before leaving to set up his own property development firm.

Series four, Lee McQueen

Called in sick on his first day. Lasted for two years before leaving to set up his own recruitment firm, Raw Talent Academy.

Series five, Yasmina Siadatan

Became pregnant after a six-month romance with a colleague. Just before returning from maternity leave, she said she was pregnant again and handed in her notice.

Series six, Stella English

Described working for Lord Sugar as "an appalling experience". After being moved around the firm, she said the job did not require enough work and is suing him for constructive dismissal.

Series seven, Tom Pellereau

Set up a company with Lord Sugar as part of the new-style Apprentice.