A man's best friend is his fish: Pete Waterman, the record producer, so loves koi he was willing to pay pounds 150,000 for a single fish. He lives in Cheshire; it lives in Japan. Tim Wapshott reports

As a topical illustration of the scale of Pete Waterman's obsession, his koi swim in pools larger than those used by competitors in the Olympics. The man whose more famous proteges include Kylie Minogue and Jason Donovan has sunk a vast chunk of his profits from multi-million record sales into his koi preoccupation at PWL Fish Industries in Cheshire.

It is a monument of glass and water involving eight large pools, 20,000 fish and three employees. 'Fish-keeping in this country is aligned with pigeon-fancying, but it should actually be compared to horse-breeding,' Waterman says. 'It's similar business: the better the parents, the better the fish.'

Koi are the samurai of the scaly set. By the mid-Eighties, these ornamental carp, known as 'kings of freshwater fish' or 'living jewels', changed hands for upwards of pounds 20,000. The top-of-the- range fish - the real McKoi - are the kobaku, boasting distinctively pure red-and-white colourings and known to change hands for sums three or four times higher.

At the height of the koi's popularity in the Eighties, fish changed hands at ever-increasing prices and wealthy notables such as Freddie Mercury, Elton John and the Duke of Westminster helped rocket them into a cult. So valuable were they that it prompted the crime of 'koi-napping', especially from ponds near the M25.

Owners took their devotion to extremes: an accidentally disfigured fish underwent cosmetic surgery in Derbyshire and a man in Southampton was so furious when his neighbour's cats kept eating his koi that he snatched the cats and dumped them miles away.

As quickly as an industry rose around the fish, the cracks appeared in koi pools. When the Bank of Credit and Commerce International fell, its smallest victims were 16 koi stranded in stagnant foyer waters at premises in the City of London. They were bagged-up and transferred to a holding pool in Kent to await the liquidator's decision on their fate.

But Waterman's passion for koi runs deep. He is completely hooked. So much so that he splashed out pounds 150,000 for one fish. They do not have a close relationship: one lives in Britain, the other in aquatic comfort in Japan. 'Some koi are bred over here but they're no good, they're junk,' he says. 'The skill is actually about the choice of the babies. We don't have that knowledge; the Japanese do - and they'll never impart it to us. They know what they're looking for at an inch long. They'll look at it and tell you it will be dead within three weeks and they're never wrong. We can look at a fish 2ft 9ins long and think it's wonderful.'

The record producer is one of Britain's estimated five million koi enthusiasts. Not content with keeping the exotic fish, he also turned breeder five years ago. Hence the hefty price he paid for his brood fish.

On paper, it seems, Waterman bought himself a bargain; or, in these tight times, perhaps not. His brood spawns a staggering 250,000 fry a year, which are flown to the Cheshire fish farm. If he's lucky, 1,000 of the fry will be worth keeping. The other 249,000, unfortunate enough to be born colourless or grow too slowly, do not survive.

Those who do not fall through the net will, when two or three years old, be sold by PWL for pounds 1,000 apiece. At least, that was the plan before the recession caused the price of exotic fish to plummet. Has the bottom now fallen out of the market?

'The real big spenders, people who would buy fish for pounds 2,000 or pounds 3,000, are not around any more - they've gone completely. The Japanese have had to drop their prices and the market is becoming a bit more sensible. A big spend on a fish now is pounds 400.'

Presumably, just as there are those who bought their homes at the height of the property boom only to find themselves mortgaged to the hilt for a house worth considerably less than its cost, some koi keepers have been bitten badly. The licence to print money has been revoked; their investment appears to be slipping down the drain.

'The recession has hit the quick-buck merchants very hard,' says Waterman. 'It started to bite two years ago, but this year all fish businesses are having a hard time and everybody is looking for inexpensive fish, for between pounds 10 and pounds 20. You have to sell a lot of those to keep your head above water.'

The comedian Jim Davidson started his koi collection four years ago when he moved to a cottage in Ewhurst, Surrey. Unlike Pete Waterman, he has names for all his fish. Pool, pumps, filters and a starter-set of fish cost him about pounds 50,000. In an extravagant gesture, as necessary as outdoor air-conditioning in California, his outdoor pond is heated to ensure that the water temperature never drops low enough to prompt the fish to hibernate.

'I've spent pounds 2,000 on a fish but not any more. I'm running out of money,' he says. 'I've got one which, maybe in a few years' time, could be worth pounds 20,000, but you don't keep them for the investment, you keep koi for the pure love of them. They're hard work, as restricting to keep as a dog.

'I've always been a fish person. My koi pond was the first thing I wanted when I moved. My brothers are the same; as soon they move into a house - pond]

'I suppose we are mad, but I would always have them. Koi look beautiful in the garden and you don't have to be rich to keep them. My brother's got koi and he's not particularly rich.'

Part of the appeal of the fish is their friendliness and familiarity. Keepers can devote hours to training their koi to perform simple tricks, mostly in return for food. Waterman recalls: 'I used to have one I would feed by filling my mouth with food and putting my head underwater. He'd suck my jaw to make me spit out the pellets for him to eat.

'You've got to remember we can't take these animals for a walk, they never come to you if you call their name and you cannot cuddle them, yet we spend hours with them. They are the most therapeutic things in the world, just enormous pleasure.'

The fish live for about 60 years, provided they are not overfed. In their native Japan, Koi are nicknamed 'Pigs of the Water' and their diet can include anything from potatoes to liver. Waterman explains: 'Koi will eat all day long, but if you overfeed them you'll kill them with kindness. They don't have a stomach, just intestine, and can't digest surplus food. In winter koi hibernate and mustn't be fed at all for about 10 weeks. The food goes into the gut, sits there and goes rancid. When spring comes the bacteria eat the fish inside out. It's known as spring fever.'

Along with 'fever', two other words can reduce koi keepers to tears: 'cat' and 'heron'. To both, a pool of koi is like open day at McDonald's, a selection of quick snacks for the taking.

Jim Hutton looked after Freddie Mercury's koi collection at the late singer's London home, where the fish still live. 'Freddie loved cats and anything Japanese,' he said. 'We gave the garden a Japanese flavour, and the koi pond was essential, but shivers went up my spine if I ever spotted a cat near the pool. In the end I covered it with netting.'

Jim Davidson also has a woeful tale about his beloved fish. 'I remember waking up one morning and looking out of the window to see a heron perched over the pond; it was like spotting someone coming to steal your baby out of a pram. I quickly put up movement detectors, cameras and infra-red around the edge. Now a little alarm goes off when the heron turns up and I set the dog on it, or the wife.'

The risks do not end with potential predators. Some hobbyists are so enthusiastic that they show their carp at specialist events around the country, with the same relish that inspires fur-and- feather fanatics to fill parish halls at weekends. Transporting show koi is a tricky businesss; to avoid damage, such as bruising, requires the moving of something similar to a child's paddling pool.

Even if your fish makes it to the venue in one piece, winning must be a nightmare. Where do they pin the rosette?

(Photograph omitted)