Profile: Builder of dreams or monuments?: Peter Palumbo, a visionary at the Arts Council

PETER PALUMBO is a rich man with dreams too big for Little Britain. His interests do not lie naturally with struggling dance companies and experimental theatre groups, but with rebuilding the world in the image of his heroes: French presidents, Mies van der Rohe and, above all, his father, Rudolph. 'Look at France,' he says with an eye on Mitterrand's grand projects - all pounds 2.5bn worth of them - 'the President decrees and it is done.'

Palumbo wants the very best, and fights to get it even if this means riding roughshod over the sensibilities of those who believe that the arts progress as well through small-scale local initiatives as they do by grand gestures.

A big man in a compact body, Palumbo wants more than either he or the Arts Council can ever deliver. And as he has been chairman of the Arts Council for the past four-and-three-quarter years - his term finishes next March - perhaps his vision has not been the most pragmatic.

Certainly, this has been a bad week. Traditionally, government funding of the Arts Council has risen every year. This week's Budget reversed the trend with a historic cut of pounds 5m. It appears that Lord Palumbo of Walbrook has been unable to advance the cause of his cultural fiefdom, despite friends in high places from Eton and Oxford, chalk-striped suits, membership of White's, a peerage from Margaret Thatcher and contributions to Conservative Party funds.

The government cut comes in the same week that the Arts Council's initiative to drop subsidies to two of London's principal orchestras comes to a head, when Lord Justice Hoffmann makes his recommendation to the Arts Council's music panel (Palumbo favours the funding of one super-orchestra along the lines of Chicago and Berlin). Hoffmann's brief has been described as 'nasty, divisive and destructive'.

Peter Garth Palumbo was born - in 1935 - to think bigger than the Arts Council, the Tory governments he supports and the British economy. Therein lies his greatness and his tragedy. His father - 'Sir' until Peter was 18; 'Papa' in public from then on - drummed into his only child the idea that 'the best was only just good enough'.

Rudolph Palumbo was a self-educated and immensely successful property developer, the son of an Italian emigre who ran a cafe in Lower Thames Street, a bun's throw from his grandson's City office. Rudolph was born with a greasy spoon in his mouth; he made sure Peter tasted only silver.

Educated at Eton and Worcester College, Oxford - where he read law, in deference to his father - Peter did all the right things: blues for polo and racquets, membership of the Bullingdon Club and a third-class degree. He has done only some of the right things ever since: country house in Berkshire, membership of the Conservative Party, White's and the Turf Club. There was a spell when he flirted with the priesthood (he has been a churchwarden of St Stephen's Walbrook, the Wren church he has restored with the addition of a Henry Moore altarpiece, since 1960), but he was soon working for his father in a pseudo-Queen-Anne office he built behind the Mansion House.

While collecting rents, the Palumbos bought the 350 or so leases and two freeholds necessary to gain the six acres on which the Victorian Mappin & Webb buildings stand, opposite the Mansion House. These acres have mapped and shaped Palumbo's life ever since. No matter how long it took (35 years to date) and damn the expense, Peter was going to build a masterpiece here. He dreamt of a tower by the Bauhaus master Ludwig Mies van der Rohe.

Mies was not just a legend; he was a financial success. The son of a Prussian bricklayer, he combined high art with steely determination and commercial acumen. 'Mies means money' said the developers in New York and Chicago.

Palumbo fell in love with Mies's work at first sight - photographs of the famous Farnsworth House shown to him by Oliver van Oss, a master at Eton. Some years later, while in the United States, he bought it (he also owns houses by Le Corbusier and Frank Lloyd Wright). He also commissioned Mies - then 75 - to design 'No 1 Poultry' for the Mappin & Webb site. Spurned by public inquiries and attacked by conservation groups that had grown up as a reaction to developers like his father (whose demolition of the 18th-century Norfolk House in St James's Square in the Thirties marked the coming of age of the Georgian Group), Palumbo was puzzled by his failure. The dunces around him could not recognise a masterpiece.

To Palumbo, Mies was more than an architect; he was a second father. 'Papa', he says, 'was very similar to Mies - they were both born on the same day. You could take intractable problems to them and they would say 'I don't see a problem'; they had the ability to reduce everything to essentials.'

If he had to live without Mies (who died in 1969), then Palumbo would have a tour de force by James Stirling, an architect as big and bluff and bright as the Prussian, and now also dead. 'I've always thought that life is a waiting game,' Palumbo says. 'It took NatWest 25 years to get their tower up . . . and I'm no one compared to them.' After a protracted and bitter fight he has finally got his way: the Mappin & Webb buildings are to be demolished - echoes of Norfolk House? - and Stirling's 'masterpiece' will take their place.

Throughout this time Palumbo did not actually develop anything himself. He rebuilt a crofter's lodge on a Scottish island and restored the penguin pool (by Berthold Lubetkin) at London zoo. Instead, he collected. Beginning with matchbox labels, he went on to penny-farthings, cars (from the latest Ferrari to a Morris Minor), paintings and houses.

He also collects contradictory roles for himself. At home in Berkshire with his second wife, Hayat, he is the corduroyed country squire who makes friends by removing 10 miles of barbed-wire fences from local footpaths and then enemies by trying to erect Ray Smith's Red Army, a sculpture comprising 1,100 4ft 6in red steel men on a path of white pebbles, on a nearby hill. While Palumbo talks of supporting the experimental arts, Hayat pursues her hobby- turned-career - classical needlepoint. The house is old-fashioned, and Palumbo commissioned a folly here by Quinlan Terry, arch-Classicist and friend of the Prince of Wales.

The Prince was once Palumbo's friend, too; they fell out over the Mies at Mansion House Square. The Prince called it 'a glass stump better suited to Chicago'. Palumbo does not forgive easily, if ever - as former friends - have discovered.

They should beware; he is also a fan of the martial arts (he broke a thumb 12 years ago tackling two burglars at his former home in Ascot - both ended up in hospital). One lunch guest at Ascot recalls watching Palumbo turn a fierce alsatian on to a retainer clad in protective clothing; the man was dragged to the ground before the dog was called off. Those visiting Palumbo in the City were all too aware of the dog lying under the desk.

That desk is Palumbo's father's; it stands in Rudolph's office in the headquarters he built for his company, City Acre, in 1952 and under a portrait of 'Papa' by Kokoschka.

Has Palumbo achieved anything more at the Arts Council than he has in architectural ventures? Financially he got off to a flying start, when David Mellor - first as Minister for the Arts and then as Chief Secretary to the Treasury - encouraged a 23 per cent increase in government contributions to the arts between 1989 and 1992. But Palumbo's penchant for grand projects - a Millennium Fund, Cities of Drama, Literature and Architecture - has made him enemies. The super-

orchestra idea is a case in point; so too was his proposal that 10 London theatres should have their grants withdrawn on the principle that it was better to spread funds more thickly over fewer houses. The idea was met with outrage; it has been dropped and Palumbo has admitted that he was wrong.

His Arts Foundation, launched in a blaze of publicity, appears to have gone to ground. It was set up with a pounds 1m donation to the Arts Council from Francis Hock, a Swiss banker. The things Palumbo's private Arts Council promised to do were to be 'Promethean, dangerous, subversive, erotic, radical and exalted'. And, judging by what has happened since, decidedly minimalist.

Palumbo's announcement that the Arts Council would help to restore every British cathedral to its full glory by the turn of the century also appeared doomed to failure. There are six years left and millions of tons of sacred stones still in need of rescue. With his consuming passion for architecture, Palumbo promised to revamp every British building devoted to the arts over the same period.

The Architecture Unit he set up at the Arts Council appears to be an equally ethereal venture. Last week it published a 50-page research document, at a cost of pounds 15,000, that came to the rather limp conclusion that the Government is not a good patron of public architecture.

Nevertheless, high-placed friends champion the scale and boldness of his vision: 'Now, for the first time since Kenneth Clark (the real Kenneth Clark) held the same office', Sir Richard Rogers, Sir Anthony Caro and Patrick Heron wrote last week in defence of Palumbo's appointment in 1989, 'we had a man of quite exceptional range and judgement.'

Yet by his own admission Palumbo is not concerned with success. 'I believe we are put on this planet not to be successful . . . but to have faith and to believe in what we undertake and to carry it through to the end, whatever the consequences. I just want to make a contribution.'

A maverick who can afford to play champion of the avant-garde; an arch- fogy, conservationist and iconoclast, Peter Palumbo confuses people who want the world to run in neat grooves. He wants to repay 'Papa' with the best - a death-bed promise - and if this means talking big in a country that thinks small, Lord Palumbo will talk monumentally.