Surely some mistake?

"HE'S EASILY our biggest fish in the City." So speaks a senior Labour figure about Lord Hollick, who last week stunned the Square Mile and Fleet Street by announcing a merger of his TV and financial services group, MAI, with United News & Media.

Labour has better-known friends in the business community. People such as Greg Dyke, the former London Weekend Television boss, who is now at Pearson; David Puttnam, the film producer; Sir Terence Conran, restaurateur and erstwhile Storehouse boss; and Chris Haskins, the voluble head of Marks and Spencer supplier, Northern Foods.

Together they have delivered election funds, favourable publicity and sound bites aplenty to New Labour. Yet somehow it is the little-known Hollick who is regarded by the party as the more valuable friend. Who, then, is this strangely anonymous media mogul? And what on earth is he doing buying into the most Tory of newspaper groups?

For United is undeniably a Conservative institution. It is one of the party's most loyal donors, and gave pounds 33,000 to Smith Square last year. Its two flagship titles, the Daily Express and the Sunday Express, are staunchly behind John Major. And its chairman, Lord Stevens, is a passionate Conservative in the House of Lords.

By contrast, Hollick sits on the Labour benches. He joined the party at the age of 15 and went on his first CND march the same year. He was ennobled on the recommendation of the former Labour leader, Neil Kinnock. He advises many shadow cabinet members on business and media issues and he is a founder trustee of the Institute of Public Policy Research - the pro-Labour think-tank.

The planned pounds 3bn merged business will span national and regional newspapers, television, market research, magazines and financial services. As well as the Express papers, United's assets include regional titles such as the Lancashire Evening Post, Sheffield Star and Yorkshire Post, and a large stable of business and consumer magazines. Stevens is to be chairman of the merged venture, Hollick its chief executive.

The immediate response both in the City and Westminster was that here was a relationship that would not work. Stevens brushes aside such suggestions. "If I'd had a second's doubt, I wouldn't have done the deal. I think we're very similar in many ways. We're both reasonably intelligent and we're both reasonably thoughtful. We're both self-made businessmen," he says.

Hollick also insists that the relationship will work but says he will be boss: "The boss of the company is the chief executive. The chairman is the chairman."

He is a slender man with a large, crooked nose and a wispy beard. At the announcement of the merger last week he appeared nervous, anxiously tugging at the growth under his chin and taking frequent gulps of water. Stevens was the more assured of the pair but, significantly, it was Hollick who did most of the talking.

In the event of a bust-up, Hollick looks more likely to survive. Nine years Stevens' junior, at 50, he is also more admired among the institutional shareholders that will ultimately control the new group. His business track record is superb.

Surprisingly little is known of Hollick, who is an intensely private man. But any hopes in Walworth Road that he will use his influence to shift the political line of the Express papers were immediately squashed. The Express titles would continue to support the Conservatives, he said. "It would be crazy to change the political affiliations of the newspaper. That's its brand."

That does not mean there will be no editorial interference, however. Hollick admires how Rupert Murdoch plugs his Sky satellite operation in the pages of the Sun and other News International titles. "One only has to look at the brilliant success of News International in deploying its newspapers in support of its satellite channels," he says.

The implication is that Express readers can expect, not pro-Blair leaders or hatchet jobs on John Major, but plugs and promotions for other parts of the growing MAI/United empire: for programmes on Meridien and Anglia, for the fledgeling satellite channels and eventually for Channel 5, an MAI venture which is due to launch next January.

When Hollick gleefully boasts: "We have an overall readership in national and regional newspapers approaching 30 million," he thinks of the audience not in terms of political influence, but as potential customers for products and services from other parts of his empire.

He has no problem being in ultimate charge of a newspaper so little in tune with his own beliefs. "As far as its politics are concerned I don't agree with it. I shall probably read it and disagree with it," he says. He sees great opportunities coming from the scale of the merger, plus around pounds 26m in cost savings. Some job losses, he admits, are inevitable.

As one of his advisers puts it: "Clive is a businessman first, second and third, and a politician only fourth." Certainly, he runs his businesses with no thought for the political implications. There was a huge rumpus when it was revealed a few years ago that he had paid some of his staff their bonuses in gold bars as a (perfectly legal) tax wheeze to avoid National Insurance contributions. This would have been unsurprising in a businessman fully embracing red-in-tooth-and-claw capitalism. But there were pursed lips among some of Hollick's chums in the Labour party.

Another irony is his early career. His first job was as a merchant banker with Hambros, a City institution closely associated with the Conservative party. He went on to forge his career in the yuppified, red-braces world of money-broking. Even today, half of MAI's profits come from City whizzkids dealing in currencies, securities and every kind of financial derivative. It is precisely the kind of City activity that Labour regards with deep suspicion.

Nor would his personal life pass muster with the more doctrinaire elements in the Labour party. All three of his daughters went to fee-paying schools, though Hollick has a more convincing explanation than Harriet Harman: "One won a scholarship, one wanted to go to boarding school - and I encourage my children to make their own decisions - and one wanted to go to a school in London with all her friends."

Yet for a decade, Hollick has been one of the party's most trusted advisers. During the Kinnock era he was at his most influential, and was especially close to the trade and industry team led by Gordon Brown. He filled huge gaps in Labour's understanding of the City, according to one fellow adviser. He is the complete antithesis of the luvvie and showbiz end of the Labour fan club - dry, analytical and unemotional. And he has won admirers because of his unpushy style. According to one party official: "He offers his views, but he doesn't lobby. He doesn't spend his entire time trying to persuade us. In that sense he differs from, say, David Puttnam."

His views are not always taken on board. He laboured long and hard last summer on a proposed points system for rules on ITV franchise ownership only to have the idea rejected by Chris Smith, then shadow heritage minister.

Part of Hollick's appeal is that he has no desire for ministerial office. According to one admirer: "Clive's influence is directly connected to the fact that he has no political ambitions himself." In addition, he

has been a Labour supporter through thick and thin - in contrast to some other businessmen who are only coming out of the closet now that Blair looks an odds-on certainty to be the next prime minister. Hollick does not go proselytising the virtues of Blair at every City lunch table, but he has never been ashamed of his views.

Although he counts many on the Labour front bench among his friends, there are few politicians among his closest cronies. Last year, when he celebrated his 25th wedding anniversary at the Design Museum on Butler's Wharf, politicians were noticeably thin on the ground.

Business associates find it difficult to gauge him. "He's quite inscrutable and a tough negotiator," according to Nicholas Cobbold, the stockbroker- turned-headhunter who introduced him to Stevens, setting up a meeting last July after several false starts. "Initially, it was rather slow," recalls Cobbold, who has known both of them for more than 25 years. "But then the ice broke."

Even his friends find Hollick difficult to get to know. "He's very good company," says one. "To spend an evening with Clive is a very nice experience, but you feel you don't know him much better by the end of the evening. It's not coldness, it's self-sufficiency. Clive likes himself and he has no desire to persuade other people to like him."

He is wealthy, of course. He was paid pounds 559,000 last year plus a pension contribution of pounds 116,000. His MAI stake is worth pounds 2.15m and his success in growing the business has boosted the current profit on his many share options to pounds 4.1m.

He is a donor to the Labour party, though not a big enough one, according to some in the party. "It is a bit of a bone of contention," says one official. One explanation is that he is too fastidious: "He doesn't want to be seen to be buying favours."

Home is a large, Victorian, terraced house in west London's Notting Hill Gate. Friends say the house is not at all grand, but a typical family home. "It shows all the signs of being bashed about by three teenage children. The kitchen is the hub. There's no grand drawing room." There is a second home in the New Forest. Other luxuries are few: Hollick drives a Rover.

His wife is Sue Woodford, a former World in Action producer at Granada. She chairs the civil liberties group, Index on Censorship, and the Theatre Museum, part of the V&A. She goes by her own name and is said to dislike the Lady Hollick monicker.

Hollick's origins were humble. His father was a french polisher, and young Clive went to grammar school in Southampton. His interest in politics was awakened by illness: "I had TB as a child and was nursed back to rude health by the National Health Service."

Explaining his Labour support, he says: "I went through the state education system and I benefited enormously from that. It's a scandal that good education is not commonplace throughout the land." His politics were also moulded by a strong belief in social justice, he says.

After Nottingham University, where he graduated in politics, sociology and psychology, he joined Hambros. In 1974 he drew up a rescue plan for a bust conglomerate, J H Vavasseur, and was soon after called to the Bank of England, which asked him to take charge of it.

He got rid of the loss-making areas, knocked heads together and renamed it MAI, after one of its subsidiaries, the poster advertising group, Mills & Allen International. At 29, he was the youngest chief of any quoted company.

For many years MAI was concentrated mainly in financial services until Hollick bid for and won the ITV franchise for the South of England. Meridian, as the franchise was called, was soon augmented by the agreed takeover of Anglia TV. MAI is also in the consortium chosen to run the Channel 5 service from next January.

Hollick's previous flirtation with the press was not happy. He was called in as a non-executive director to beef up the board of Mirror Group after Robert Maxwell's death. On his recommendation David Montgomery was appointed chief executive but the two later fell out and Hollick quit.

MAI has continued to prosper. In the last 10 years, turnover has quadrupled to more than pounds 800m, profits have grown five-fold to pounds 106m, and the share price has rocketed from 65p to 448p.

He cannot see the merger with United being derailed, despite speculation that the announcement has put both companies "in play" and that it could flush out a takeover bid for either or both of them. And he sees the group being much bigger within five years, partly through organic growth, probably by acquisition, too.

He does not rule out a step change created by another merger of equals. The new company is still only 17th in the ranking of world media groups. We have not heard the last of Clive Hollick.