The Ivy League

Those leaded windows conceal the only restaurant any star worth their lunch wants to be seen in. And now it's the subject of a takeover battle as colourful as its clients. How does it do it on a diet of shepherd's pie? Janet Street-Porter reports (from an A-list table, natch)

When the beleaguered Iain Duncan Smith needed a quick bit of image building, where did he lunch last week? The Ivy of course. Although he bills himself as the quiet man in touch with "reality", when the going got tought on Wednesday he was quick to dump a planned photocall on a council estate in the East End of London for the far more fashionable alternative of shepherd's pie and Caesar salad with a tableful of TV executives in Covent Garden. Like Posh, Elton, Ruby and Jerry before him, Mr Duncan Smith paused as he exited, smiled and allowed himself to be photographed outside those legendary leaded windows getting into his car. Mission accomplished. Forget promoting the right-to-buy policy outside a drab tower block, watched by a couple of pensioners and a dog – Mr Duncan Smith had opted to check into celebrity central.

This is not the first time a figure in the public eye has clutched at the opportunity presented by Britain's most famous eaterie to improve their image. Who can forget Danniella Westbrook's triumphant exit complete with new husband, new giant breasts, an expensive fur coat and a tiny chiffon dress? The message was clear – forget drugs and the missing bit of nose and my sleazy past: I'm back where I belong, with my peers, the success stories.

Why does the Ivy have this talismanic quality? In our celebrity-driven culture it is not just a fashionable place to eat and be seen, but people genuinely believe that being there at the right time and at the right table will send a message clearer than any press release or interview, that you are well and truly on board the Cool Britannia Bus. Little wonder that it is being fought over by two restaurateurs, both grimly determined to become its owner (see right).

A triangular room with cosy wooden panelling, unthreatening pictures by Sixties pop artists such as Allen Jones and Joe Tilson, dark wooden floors and chairs, the interior is nothing special. Neither is the menu – from roast chicken to lobster and chips, shepherd's pie and endive salad, there's nothing new-wave or fusion about this fare. Straightforward, reliable, comfort food cooked with the best quality ingredients. Suprisingly good value. Nothing in a pyramid, no weird amuse-bouches in tiny cups, no splatterings of sauce Picasso-style on your plate. The body-conscious gays can order Caesar salad minus the croutons and the female dieters can stick to grilled prawns. You can have sausages minus the mash or an entirely raw meal of native oysters followed by steak tartare. I've seen it all. The staff are unfailingly polite and most have been there for years. Any new waiters will be unbelievably pale and cute, with very short hair, just young enough to feed a few fantasies after that second bottle of wine.

The Ivy is not just crammed with celebrities. Taxi drivers tell me they adore the set Sunday lunch and are willing to book ages in advance in order to impress their mums. Go on a weekend lunch and you will find it full of children and non-famous families having a terrific time. Monday to Friday lunch is for deal-making, weekday dinners for the inner circle who can call up 24 hours before and get a table in the main part of the room, not Siberia on the far side. The upstairs room is reserved ages in advance for book launches and private parties. I had my birthday there one year for 20 people. We decorated the table ourselves and brought along our own music.

Why has the Ivy survived as the place most visitors want to go to, and anyone who is anyone in show business yearns to be seen at? Why is it now the most desirable restaurant in London to own? Because it cleverly mixes the clientele up on any one night. During the current tourist drought, many London restaurants have hit the ropes. The Ivy will always be able to boast a clutch of minor league soap stars and supporting actors, and after the theatre you may be rewarded with a glimpse of Dame Judi Dench or Michael Gambon, Prunella Scales or Kevin Spacey. But the fact is, they can fill the place and turn over a huge profit feeding the non-famous who have been drawn to the flame of celebrity. Even the well-known delight in ringing up their mates and crowing about who they saw there and what they were wearing, about Dale Winton's impossible mahagony tan and the fact that Sean Connery walked past their table to the men's loo minus his toupee, sporting a well-worn cardigan.

Even I have dashed to the ladies' lavatory upstairs, hung my head out of the window for better reception and used my mobile to regale someone with the sight of Diana Ross's giant hair. She had just given an interview to a magazine extoling the virtues of healthy eating, and we had just seen her tucking into roast beef and Yorkshire pudding. So a night at the Ivy is like being allowed into a party with the best guest list you can imagine. Under the stairs sits Tom Cruise; there's Joan Collins on the banquette by the cash till (good for watching everyone) and Sir Ian McKellen's over on the left-hand wall.

One night I watched as a swarthy Russian stuck his hand under the table and up his girlfriend's very short dress. She was clearly wearing no knickers and started writhing in her seat. Stupidly, I got up and asked the man to stop, saying he was putting me off my food. Then he drew himself up to a daunting six foot two and started threatening me. It was extremely frightening. Neil Tennant and I dashed for the door and went for a calming drink. Sean the doorman called to tell us the Russian had been ejected and it was safe to return. He would send a taxi if we wanted to go back for dessert.

The Ivy is where you can see at close range who looks nothing like their publicity pictures and who has had a face-lift. You can check on Joan Collins' latest wig. There are people who go there all the time – Neil and Christine Hamilton for example – who never pay, and others who have accounts and just get up and leave without having to produce a credit card. Charles Saatchi once ate there every night for two weeks. I even played Scrabble with him on a corner table.

Yet the Ivy is suprisingly unélitist. No one large table ever dominates the room. It's like getting a walk-on part in a movie for one night. Try the alternatives and you will see why it is still in pole position – the other night Nobu was full of screaming eurotrash and if you can put up with the singing at Momo, you are more patient than me. Yes, we know Tony and Cherie and Guy and Madonna adore Locanda Locatelli, at the back of Portman Square. The food is excellent. But if you want your spirits lifting, go and join the party at the Ivy.

The Battle

In the red corner we have Luke Johnson, son of the right-wing journalist Paul, and the man who made Pizza Express a household name. Rarely seen eating in his own restaurants, Johnson is the opposite of the celebrity restaurant owner – shy, unflashy and nervous of the press. Few of the Ivy's diners would recognise him if he sat next to them: unless, that is, they had seen the BBC's Back To The Floor two years ago, in which Johnson spent a day as a waiter at one of his Belgo branches. He didn't do well, quickly running out of patience with carping staff before telling the producers that they could "stick their programme" and storming off the set.

Giuliano Lotto, his opponent, is a very different animal. Raised in a wealthy Italian family, he is a founder of A-Z Restaurants, which runs Zafferano, L'Oranger and Aubergine. Charming and flamboyant (with "the most fantastic eyes", according to one ex-colleague), he couldn't be more different to Johnson. Last week he mounted a counter bid for Signature, the Ivy's parent company. And if he wins, his style will be very different. "He'll be there every night," says another ex-colleague.

This would be in keeping. Although it has featured on the London scene since before the war, and was a favoured haunt of Laurence Olivier and Vivien Leigh, the Ivy was strictly a thespian watering hole until 1990 when Christopher Corbin and Jeremy King – legends in the restaurant trade in their own right – took over. They understood that the secret of restaurant magic is the less you see, the more you believe. The Ivy, in contrast to the rest of today's self-reflexive celebrity dining scene, has never courted PR. Instead, King walked the floor, lightly bearing an encyclopaedic knowledge of exactly who was writing, directing, producing and acting in what.

Four years ago they sold the Ivy to Luke Johnson's Belgo Restaurants, now Signature. Since then, Johnson has seen the share price of his group slump as its restaurant chains have failed to meet expectations. Yet the Ivy, Caprice and Sheekey's –the group's other premium restaurants – have outperformed virtually every other restaurant in London. So, last month Johnson and his fellow directors attempted a management buy-out, offering 60p per share, 50 per cent more than their trading price. Few thought shareholders would pass up the money.

But they reckoned without Lotto. Backed by Park Place Capital, which owns part of Signature, Lotto last week launched a counter-bid of a rumoured 70p per share. The shareholders have until 20 November to choose; Johnson to raise his offer.

The trade is on tenterhooks and most people have a preference. Plenty thought that when Corbin and King moved on, the magic would go with them. But Johnson has proved to be up to the job, running "perhaps the only London restaurant which has stars on tap, but still treats the unknowns like stars", as Richard Harden, of his eponymous Guides, describes it.

While we are unlikely to see a chain of Ivys, some in the industry wonder whether Lotto will be able to resist changing or expanding the formula. "He has no passion for food," says one chef who has worked for him. "He could just as easily go into hairdressing in a year's time – and he doesn't have a good record with great chefs. He loses them." Gordon Ramsay marched himself and his kitchen staff out of A-Z Aubergine in a blaze of publicity four years ago. And London restaurateurs, who have long memories, point to Marco Pierre White's earlier exit from The Canteen, his venture with A-Z, and Georgio Locatelli's move from the group's highly rated Zafferano as evidence "that Lotto can't handle talent".

But his restaurants are still big hitters, and his allies say he knows that only a fool would change the recipe at the Ivy. So what if the owner eats there? It would be perverse if he didn't. And his "continental, raffish touch", as one observer described it, could mark a welcome new twist.

Johnson has his critics too. Some say his TV appearance did the industry no favours, and even put the decline in the chain's fortune down to it – an absurd accusation, but it illustrates how hot this feud is becoming. The two sides agree on only one thing: each man is determined to win this one. Take your seats for the next course everybody.

David Lancaster