Lord of the butterflies: Clive Farrell has turned his Dorset estate into an insect-filled fantasia

The eccentric tycoon's ultimate dream is taking flight: a domed temple to lepidoptery, the like of which the world has never seen

"Look, there he goes. Wonderful, isn't he?" Navigating the tangled branches of a bramble bush, a waiflike insect flits between flowers to feed on nectar. Each time it lands, its wings stop flapping and their colours come into focus. Delicate panels of burnished gold radiate from a grey body, finishing in cobalt blue spots around the edges. "It's a Small Tortoiseshell – probably just hatched this morning. They're quite rare this year, but they're thriving here."

Clive Farrell is probably the world's only millionaire property developer butterfly entrepreneur. To visit his home near Sherborne, Dorset, is to enter an otherworldly kingdom colonised by shimmering winged insects with names like the Grizzled Skipper and Glanville Fritillary. The Small Tortoiseshell is feeding in Farrell's "Bramblearium", a riot of wild flowers and nectar-rich brambles sitting in a small corner of the grounds around Farrell's house, a former mushroom farm. From his office on stilts, which, appropriately, resembles an air-traffic control tower, Farrell commands an ever-expanding lepidopteran empire that includes woods, tropical greenhouses and meadows covering over 100 acres.

Beyond the hedgerow borders, which teem with wildlife, Farrell, 62, owns a farm in the jungle of Belize that breeds 3,000 specimens a week, including the Blue Morpho, a vision in iridescent blue and as big as a man's hand. He also co-owns butterfly centres in Stratford-upon-Avon and Fort Lauderdale, Florida. But that's not enough for Farrell. A hundred miles northeast of here, a glass-domed temple to winged insects is emerging from a green field near St Albans, like a butterfly from its chrysalis. Butterfly World, which was launched by Sir David Attenborough earlier this year and will cost £25m to build, should be completed by spring 2011. Farrell has dreamt of the day for more than a decade. "St Albans represents the climax of my knowledge and experience," he says. "It will be my life's work – it has to work".

Sitting on a seat carved from a Sumatran teak stump in the garden of his home, with his "long-suffering" (his words) yet effortlessly glamorous wife, Rajna, by his side, Farrell wants to talk only about butterflies. He is accompanied by a chorus of birdsong and the tinkle of wind chimes from his office. "Butterflies are fragile, beautiful and harmless – a symbol of freedom," he says, gaining momentum. "Their cryptic colouring and survival techniques make them endlessly fascinating. Do you know, there are some species of heliconius butterfly that feed on passion flowers, but the vines fight back; they produce mimic eggs that fool the female into thinking it has already laid its eggs there, so it goes elsewhere."

Farrell's love affair took root in childhood. It was an upbringing he describes as "incredibly happy" – a Durrellian idyll near the New Forest in Hampshire. His father, a Second World War pilot, and his mother ("the most unselfish parents you could imagine") adored the natural world and Farrell would ' keep snakes, lizards and rats as pets. "When I was six I found a caterpillar in the garden and put it in a matchbox, as thousands of children did before me. But I just happened to be around at the very moment it hatched out of the cocoon it had spun, and dried its wings. I have a theory that we all have a magic moment as children that goes on to change our lives."

Reality bit when Farrell left school. His parents found him work in a solicitor's office before he headed to London to study law. "My heart was always in the countryside," he says. To stop himself going "completely mad" in his London bed-sit, Farrell bred giant silk moths in a cage. "Many a puzzled neighbour saw their privet hedges trimmed in the dead of night so I could get fodder for my caterpillars." There were hawkmoths too, and a Burmese cat. "One day the wretched cat came into my room with a moth in its mouth. I thought it had knocked over the cage but it was still there, surrounded by male hawkmoths who had come for miles to mate."

Farrell's career in law was probably doomed before it began. "I realised I would never make a good solicitor. Half the time I lived in a world of imagination – I still do." Torn between his passion and the pressures of adulthood, Farrell did what any 21-year-old would – he went backpacking to "find my soul". Home a year later, his wings stretched, Farrell needed to find a way to fly. "I realised that to do what I really wanted to do – travel the world and study butterflies – I needed to be filthy rich." Still in his early 20s, Farrell joined forces with the owner of a junk shop to start a flat-letting agency in West Kensington, London. His legal training gave him a head start and the money soon started rolling in. Farrell won't discuss the portfolio he has built up in the past 40 years and seems almost ashamed by it. "It's been an unwelcome but necessary distraction," he says. "But it's my ill-gotten property gains that have been the fuel to fire my fantasies."

Farrell the butterfly entrepreneur took flight in 1981 after his elder brother, a veterinary surgeon, had been called to the Duke of Northumberland's Thameside pile, Syon Park, to treat an iguana. The Duke, a butterfly enthusiast, agreed to meet Farrell. "He offered me a site for a butterfly exhibition if I could get planning permission," he recalls. Dame Miriam Rothschild, the renowned entomologist and heir to the Rothschild banking fortune, got wind of the plan and called Farrell to her house. It was a meeting of two insect-obsessed eccentrics that would lead to a long friendship. "She taught me a lot of what I know," Farrell says of Rothschild, who died in 2005, aged 96. "She was my hero and mentor." Aided by Rothschild, and an appearance on David Attenborough's Wildlife on One, the butterfly house at Syon Park was a success. It set the blueprint for the (not always successful) ventures that followed, including butterfly worlds in Edinburgh, Weymouth and, ultimately, the grand project at St Albans.

Moving gracefully through wild flowers in the field Farrell calls the Giant's Domain, wearing a brilliant-white linen smock and bug-eyed black sunglasses, Rajna (whose age – a "state secret" – is put by her 19-year-old daughter, Sonja, at "early 50s") looks almost as if she might sprout wings and take flight with her husband's butterflies. Watching Farrell watch his wife as she talks, it's easy to see what drew him to Rajna; but what drew a beautiful Serbian design studio assistant working in Hammersmith to an eccentric former solicitor and butterfly fanatic? "I met Clive at a dinner I hosted for my boss," Rajna says in a refined Eastern European drawl. "He was like a fish out of water and I was concerned, so I got talking with him. Later he showed me the beautiful moths he was breeding. He used to drive me around in his London taxi and I fell in love with this extraordinary man."

The pair married and soon after the birth of Sonja, who followed Luke, now 25, they moved to their Dorset home. ' Straight away, Farrell set about buying the surrounding area and turning it into a butterfly wonderland. The most imaginative of the features that dot Farrell's sprawling gardens lies near the centre of the Giant's Domain, a field guarded by a giant dragon that Farrell has commissioned a team of "fake-rock" builders to construct using a skeleton of timber and wire mesh. The Island of Dreams is a mound of earth blanketed in vibrant wild flowers. Perched at the summit stands the giant's four-poster bed, topped with a blue and white canopy. There is also the giant's well, built in stone, from which rises a steel ladder sprayed gold. Farrell calls it his stairway to heaven. "I like to lie on the bed and dream," says Clive. "After a good Sunday lunch and a glass of wine it's a nice place to be."

Butterflies aren't the only species to have made a dream home in Farrell's garden. "If you get it right for butterflies, you get it right for nearly everything," he says. There was a recent sighting of the rare Bechstein bat and endangered great crested newts are flourishing in the ponds. But, just as a thriving population of butterflies is the sign of a healthy ecosystem, a declining one is a sign of trouble.

"Butterflies are the canaries in the coalmine," Farrell explains. "They are very sensitive to pollution, climate change and loss of habitat." A report last year by the charity Butterfly Conservation showed that 76 per cent of British butterfly species are in rapid decline. The populations of six species have more than halved since the 1970s and five species have become extinct. "They are fragile but they haven't survived thousands of years without an ability to bounce back – you've just got to provide the right habitat."

When finished, the St Albans Butterfly World will be the world's biggest "walkthrough butterfly experience", with more than 10,000 tropical specimens inside the 100m glass biome at the centre of the 26-acre attraction. There'll be underground caverns with scorpions and spiders and, outside, more than 230 trees and hundreds of metres of hedgerows to attract native species. But the dream almost turned into a nightmare; the project was delayed for several years when Farrell failed to get Lottery funding. "If ever there was a project suitable for the Lottery this was it, but we didn't even get a second look." Farrell has now split the project into two phases. The first, which will cost £10m and will be ready next June, will include six permanent gardens designed with the eccentric landscape gardener Ivan Hicks, who "lives in a parallel universe" (which is quite something coming from Farrell). Phase two will see the completion of the central dome.

Farrell has "organised" the first £10m but will rely on others to buy shares to finance the rest. One early supporter is the actress Emilia Fox and her husband Jared Harris, son of the late Richard Harris. Farrell met them when he was asked to release butterflies at their wedding: "There were more pictures of me in Hello! than of the bride and groom!" Sir David Attenborough, David Bellamy and Alan Titchmarsh are other high-profile supporters and Farrell hopes the public will follow suit. "I'm confident people will buy a bit of the magic," he says. "Otherwise I'll end up with a bloody great concrete ring and a few gardens."

Back in Dorset, Farrell is continuing the tour of his grounds. There is a gnome's house guarded by a lifesize statue of Dodder, the "oldest gnome in England" and a character in the children's book The Little Grey Men. Nearer the house, in the shadow of the office, Farrell has built a "plant prison", where the "villains and thugs of the plant world" are confined to cell-like beds. (A ghost bramble – the "Hannibal Lecter of brambles" – is grown behind bars because its arching branches appear to reach out and grab passersby.) It's a tour Farrell clearly loves giving but he has resisted calls to open to the public, allowing only the odd school group and gardening club to enter his entomological Neverland. "We value our privacy," Farrell says. Watching him survey his empire, it's clear he hasn't built this garden for curious visitors; it is a personal project borne of his love affair with the butterfly and an imagination as wild as the flowers that blanket the fields here.

In the Bramblearium, where the Small Tortoiseshells are gorging on nectar, Farrell recently spotted rare Small Blue butterflies on a south-facing chalk bank built to lure such creatures back from the brink of extinction. The scent of nectar drew them from a colony miles away. "The thought of a blue butterfly hurtling out of the sky and colonising here," says Farrell, "in the gardens I have devoted my life to, fills me with so much joy you can't imagine."

Farrell's favourites

1. Blue morpho

'As big as a man's hand, these spend 70 days as caterpillars; their colour is worth the wait'

2. Psyche

'These bob up and down as if on elastic. They have a radar detection device to help them avoid spider webs'

3. Peacock

'I love the eyespots on the wings and the way they make a rustling sound like a woman in a silk dress'

4. Cyrbia

'Sometimes known as the Postman, it has an iridescent blue colour due to light refracting on its wings'

5. Adonis Blue

'Almost extinct a few years ago after losing its chalk grassland habitat. I've reintroduced it in my Bramblearium'