THE PEOPLE in this picture are working to change the daily habits of millions of Britons. So commercially sensitive is their operation that when they gathered this week for a strategy meeting, many of them preferred to cover their heads at the sight of a camera. 'We still haven't decided on a name. So what shall we call ourselves?' said one of them.

'Well,' said another, 'I'm all in favour of Radio Big Ears.'

Applications for the next round of commercial radio licences for the London area have to land on the desk of the Independent Radio Authority by the beginning of June. One of them will come from the team in the brown paper bags.

At their helm is John Lloyd, Britain's most successful comedy producer, the man who invented Not the Nine O'Clock News, Blackadder and Spitting Image. When the idea of a radio channel dedicated to humour was put to him three months ago, Lloyd committed himself to it immediately. He turned down the opportunity to direct Naked Gun 3 in order to spend the next few weeks sitting in meetings in darkened rooms, amid a litter of Styrofoam coffee cups and rejected ideas, creating a radio station.

'I think a lot of people thought I was mad to turn down Hollywood,' he says. 'But this, it's like Viz: an idea so good you can't understand why no one has done it before. And when you've been working in advertising, as I have for a while, you greet the arrival of a good idea like you would an old friend.'

Lloyd found that a sizeable chunk of Britain's comedy establishment - Angus Deayton, John Sessions, Ruby Wax, Terry Jones, Peter Cook, Dudley Moore, Rory Bremner, Stephen Fry, Griff Rhys Jones - shared his enthusiasm and pledged themselves to present or prepare programmes. With this support he set off to fill in one of the authority's novel-length application forms. Unlike many of his rival consortia, Lloyd has had to invent not just a new schedule but a new concept for radio.

'If you were putting up for a country music station, for instance,' he says, 'you'd put on your application: '7am to 9am - country music; 9am to 11am - country music; 11am to 1pm - er . . . well, more country music.' We have to be slightly more detailed than '7am to 9am - funny bit'. We are starting with a completely blank piece of paper.'

To fill his blank piece of paper, Lloyd has undertaken a frightening round of business and planning meetings. Tuesday was a typical day in his life. In the morning he went to Douglas Adams's office to discuss programme ideas. In the afternoon he went to a Soho comedy production company to discuss joint ventures. And in the evening he went to Sunbury-on-Thames, where a group of average South-easterners were to sit in judgement of his concept while he watched impotently from behind a two-way mirror.

It all began in March at Douglas Adams's house, where, around a dining table the length of the new runway at Stansted (one of the spoils of writing The Hitch-hiker's Guide to the Galaxy), people such as Chris Donald of Viz and Stephen Fry fired off some astonishing ideas for programmes on the new station, many of which would cost more than the contents of John Birt's pension fund to produce. Fry's, for instance, involved him going undercover in drag, wired up like a police witness.

This week, the group was meeting again to think of programmes that would be somewhat cheaper to produce. Douglas Adams set the agenda: 'What we've basically got to find are as many ways as possible to get people on who will be funny for free. I like the idea of two people arguing the merits of two albums. You know, Dark Side of the Moon against Sgt Pepper. People getting really vehement about their tastes.

'Let's get some names down here. I'd certainly want to do one, though I couldn't argue against Dark Side because Nick and Dave are mates. So: Angus, Stephen, Gambaccini, Sting . . . Elvis Costello, he'd love it. Two hours' riveting radio.'

Several people took notes furiously as Adams, walking around his office, flowed. 'I know,' he said. 'Police Watch. We get John McVicar to host a show where everyone rings in with stories about how ghastly the police are. We've all got them. We could even get the police in occasionally to comment, perhaps.'

'Maybe we'll keep that one under our belts as far as the Radio Authority is concerned, Douglas.'

'We could couch it as consumer feedback. Anyone know McVicar?'

'No, no.' Nobody knew him.

'I've met Jimmy Boyle,' said someone.

'Oh. Right. Jimmy Boyle. Pin your ears to the floor. Ha ha.'

While Adams dashed off to his computer to send an AppleLink message to Richard Dawkins ('get Dawkins to interview a bishop. Riveting . . .'), one of the people in brown paper bags (who were, in fact, moonlighting from their day jobs on radio and hence anxious for anonymity) suggested reading a book all night. 'The aural equivalent of something you can't put down. Read the whole thing, take five hours over it. A Book At Night-time.'

'Yes,' said Lloyd. 'And listeners could ring in to say they didn't follow the plot, and get the reader to go back over a bit. Or if the reader had to go to the loo, he could get a listener who had a copy of the book to ring in and take over from him while he was off peeing. This is very good territory.'

Fresh from his computer keyboard, Adams volunteered to read his own books for hours on end. 'Great, all for it,' he said. 'But I know a bit more than other authors about marketing. Authors are Cro-Magnon types, they'll feel it's not right unless money changes hands. They don't necessarily mind which direction it goes in; they'd be perfectly happy if the publishers paid the radio station. They'd feel that was good promotion. And we'd think it OK if publishers paid us, wouldn't we? Right, I'm off for lunch.'

Lloyd, however, wasn't. After they had swapped car- and mobile-phone numbers, the group split up. Lloyd and a couple of paper-bag men went off to Soho in a taxi. 'You see all those people in their cars, sitting in this jam listening to the radio?' said Lloyd. 'In two years' time, they'll all be laughing. Laughing in a traffic jam. That's public service broadcasting.'

On the drive to Sunbury for the evening's market research, Lloyd and three paper-bag men ran through their station's proposed daily schedule. 'Right,' said Lloyd. '7am - breakfast with Angus Deayton and Ian Hislop.'

That was a coup - had he really signed those two up for a breakfast show?

'Oh come on,' said Lloyd, whose tie was now firmly at half-mast and whose eyes were beginning to redden. 'Let's not let reality get in the way of a good programme schedule. Let's say Paul Merton as well.'

Lloyd was nervous about the market research. In 20 years of inventing hit shows, this was the first time he had put his creative process to such an early test. 'Christ knows why we're doing this,' he said. 'Any comedian knows market research, you have a meter inside you. You are in the business of pleasing people, so you know exactly what people want. No good programme has ever been made by market research. They're made by people with ideas.'

He was no more comfortable when he was led into the small spying room where, through a two-way mirror, he could watch a group of Mr Averages discuss his product (Mrs Averages were to be tested the next day).

'Jesus,' he said. 'I feel extremely uncomfortable, like I'm peering through somebody's curtains.'

When the market research group was presented with a list of names for a potential comedy radio station, he shook his head in depression. 'Radio Big Ears,' said one man. 'It's pathetic, it's juvenile.'

'Oh,' said another, 'I thought it was very funny.'

What about a morning show, the panel was asked, with Angus Deayton, Ian Hislop and Paul Merton? 'Bit too clever for me at that time of the morning,' said a third man. 'Well, I'd definitely listen,' said another. 'And I like to think I'm a vaguely average person.'

At the end of two hours, in which Lloyd had seen his embryonic proposal picked at like a piece of old chicken, he was invited to address the group. 'Really,' he said, 'All I want to say is, forget the pretentious crap, it's going to be funny.'

On the drive back to London, Lloyd appeared very depressed. The man who did not believe in market research suddenly found himself confounded. 'They should have been jumping up and down in there. Why weren't they as bloody excited as we are? Well, I think it's a good idea and I haven't made a programme since 1975 which I didn't think was. And that appears to have worked.'

'It's like the man who blends cognac,' said one of the brown paper bag team. 'He knows what everyone will like, he doesn't need market research. You're the cognac blender of comedy, John.'

Lloyd loosened his tie further, lit a cigarette and looked as though he wanted to cover his head in a paper bag.

The next morning, however, he was back at his scheduling. 'God, I tell you,' he said over the telephone. 'We've got some cracking ideas. In two years' time, the people in Sunbury-on-Thames won't be listening to anything else.'

(Photograph omitted)