The frugal internet guru who found a taste for the high life

The Arrest yesterday of Cliff Stanford, the founder of Demon Internet, was the latest humiliation for the one-time king of the internet world.

At 49, Mr Stanford is older than many internet geeks and can justifiably claim that Demon, an internet service provider, has been one of the few and lasting success stories - he sold it to Scottish Power in 1998 for £66m, of which he pocketed £30m.

Mr Stanford, who grew up in Southend-on-Sea and was raised by his mother, has often said he likes to be frugal at the companies he runs, but has since gained a taste for the high life. He once declared: "You can never have enough money."

An incident that greatly raised Mr Stanford's profile - and a few eyebrows among City investors - was a double-page spread in the News of the World which told the story of two table-dancers and their claims of champagne-fuelled romps with Mr Stanford. They said he had "a demon touch".

Mr Stanford, who also has a fondness for the toys that go with business success, such as private jets, has denied the story, saying the details were so wrong even his mother did not believe them.

Mr Stanford hired the public relations guru Max Clifford. Redbus Interhouse - unknown when Mr Stanford set it up just three days after selling Demon - raised its profile by sponsoring Charlton. Demon previously had its name emblazoned on the shirts of Fulham Football Club.

There have been rumours that most of Mr Stanford's personal fortune has been spent. He travelled from his home in Spain to go to Belgravia police station yesterday to keep an appointment with the police. He was arrested and questioned about Redbus, another internet company that he has since left. No charges have been brought.

The fun-loving entrepreneur asked a corporate investigator, George Liddell, to uncover information such as e-mails sent to some Redbus directors. One director - John Porter, the chairman of the company until March - is the son of Dame Shirley Porter, the former leader of Westminster City Council.

E-mails that the two came across includes one which seems to say Dame Shirley, whose assets were frozen after she refused to hand over £37m Westminster council is owed, is considering lending her son more than £1m.

Mr Stanford denied that he or Mr Liddell had hacked into Redbus's computers but his arrest is the latest incident to emerge in the past few days. On Wednesday, he confirmed that bailiffs had been sent to his London office after he refused to pay the rent.

Redbus is suing him for £85,000 of company funds it claims were used to renovate his Spanish villa.