Paging Dr Freud - surgeon of spin

The government's controversial handling of its casinos project has put all-powerful PR Matthew Freud centre-stage. Ian Burrell reports

You must never come between the footlights and the stage," Matthew Freud once observed. "I think the moment I begin to have a public profile may be the moment I have to move on."

Freud, or "St Matthew of the Shadows" as he has been called, has this week been hauled out of the wings and forced to not only tread the boards and but take a couple of curtain calls too.

Revealed as "the Great Manipulator", pulling the hidden strings that gave his client, the American casino billionaire Philip Anschutz, direct access to Culture Secretary Tessa Jowell, his role as the link between power players in the British political, business, media and showbusiness arenas has been laid bare. He is the friend not only of media players such as Piers Morgan, Rebekah Wade, James Murdoch, Henrietta Conrad, and Peter Fincham but also of senior political figures including Tony Blair, David Cameron, George Osborne and Alastair Campbell.

Few can resist a dinner invitation from Matthew and his wife, Elisabeth Murdoch, to their double-fronted Notting Hill home or their country house on the Duke of Marlborough's Blenheim estate. Certainly not Ms Jowell, who sat down to table in west London and inadvertently found herself networking with Mr Anschutz.

All this further confirmation of Freud's status as "the best-connected man in London" will of course damage neither his standing nor that of his public relations business Freud Communications, which numbers Nike, Pepsi, Sky, Red, the London Olympics and MySpace.com among its clientele.

But how he should have come to occupy such an exalted position in British society is in some ways odd. Freud Communications is ranked only 10th in the London PR pecking order, with its annual fees of £12.8m in 2005 leaving it trailing far behind Tim Bell's Bell Pottinger, according to the trade magazine PR Week.

Freud's rise to prominence has hardly followed the smooth upward trajectory of the Nike swoosh, the sort of easy ride you might expect of the great-grandson of Sigmund Freud and son of Clement Freud MP, and who - through his marriage to the television executive Elisabeth - became the son-in-law of Rupert Murdoch.

Freud was a wild teenager, who would hire himself out at parties with a python called Orlando wrapped around his neck. He then set up what was claimed to be London's first singing telegram service and - like his future friend Chris Evans - was known to do the odd gorillagram. He found himself in court when the Drugs Squad raided his South Kensington flat, seizing cocaine and cannabis, and when the Horseferry Road magistrate, Kenneth Harrington, let him go with a £500 fine, Freud was told: "I am going to deal with you as a foolish young man."

His first job was as a press officer for RCA records but in a demonstration of his raw ambition he left in 1983 to set up Matthew Freud Associates, which was essentially him, three phone-lines and his cat. Freud has recalled these early years as "a painful, intense and frightening experience... it was horrible, really horrible". His father expected him to go bust at any moment.

Freud once claimed in an early interview that he had no idea what attracted him to PR other than that it was "a way of getting to the bottom of what celebrity meant, what it involved. I also wanted to do something nobody in my family had done, so I wouldn't be compared with anyone."

This - as Freud was later to discover - was untrue. The man credited as being the founding father of the public relations industry, Edward Bernays, who worked for American corporations such as Procter & Gamble and Dodge Motors in the early 20th century and developed what was called "the science of ballyhoo", was Matthew Freud's great-great uncle.

Though Freud purportedly shies away from self-publicity he has never been short of self-belief and already appears to have written his own entry in the PR history books. Publicity material for one of his companies reads: "Matthew has played a significant role in redefining the PR industry from a second-rate hospitality function to the front-line art form of controlled media manipulation for brands, personalities and media properties."

It is a grand claim but - though it might make many journalists' stomachs turn - it is not an outlandish one. As one rival PR entrepreneur says: "Matthew is a very clever operator and any PR that doesn't acknowledge that is not being honest, frankly. His lasting contribution will be that he put together brands and celebrities so well."

Indeed, it could be said that through his transformation of the nature of consumer public relations, Matthew Freud originated and shaped contemporary celebrity culture in Britain.

The pivotal moment was in 1992, when Freud organised the London launch of the restaurant chain Planet Hollywood, and persuaded backers Arnold Schwarzenegger, Sly Stallone and Eddie Murphy to attend. The splash headline in the Sun the next day was, "20,000 go Arnie barmy", alongside a huge corporate logo. By any standards it was a PR triumph.

During an 18-month period, Freud established himself as London's go-to man and his circle of influence grew. He arranged the premiere for Four Weddings and a Funeral, written and produced by Richard Curtis (who is now married to Freud's sister, Emma) and helped make a star out of Evans and his Channel 4 show The Big Breakfast.

Subsequently, he has had rivals gasping in admiration by getting blanket tabloid exposure for a picture of Robbie Williams dressed as a woman and drinking 7Up Light, on a single poster site Freud bought for £140. He has manoeuvred Cat Deeley on to the cover of Sunday Times Style holding a new Braun Oral-B 3D Excel toothbrush and persuaded the Daily Mirror to give away free cans of relaunched Pepsi with every copy.

Freud was able to sell his business in 1994 to the advertising agency Abbott Mead Vickers (AMV), for a sum which he has indicated is north of £10m. He has repeatedly suggested that the PR business is not big enough for him.

"Old PR men are deeply sad individuals. I don't think I would want to spend my whole life in a derivative business. You can only do it with a passion when you are young," was one memorable comment. Yet when he sold up, he continued as the face and driving force of the company, aided by his able younger deputy Kris Thykier. Then, when AMV became part of the giant Omnicom media group, Freud bought his company back.

Labour peer Waheed Alli, a business partner of Elisabeth's at production company Shine and a partner at Planet 24, which made The Big Breakfast, believes Freud is well capable of operating in a bigger pond than just the PR world. "The thing people underestimate about Matthew is that he's a brilliant strategist," he has said.

Freud, 42, is more than simply a public relations operative. Freud Communications' current mission statement is to provide: "Strategic marketing and communications consultancy for consumer brands, public sector bodies and global corporations."

Ravi Chandiramani, editor of PR Week, says the company has recently moved beyond its celebrity/consumer brands base and notes it has hired a succession of former government advisers, including former Blair aide Kate Garvey. "Increasingly, Freuds are moving into the corporate and public affairs space. That means, as a business, it has put more emphasis on developing good contacts in government circles."

Not that Freud's own business ventures have been universally successful. He lost millions on Oxygen, an early new media adventure, and another web-based business Toyzone went under six years ago. Freud's foray into catering alongside Damien Hirst has also floundered after early excitement around their Notting Hill restaurant, Pharmacy.

He hasn't always been great at his own PR. In one interview in 1989, headlined "The hustler", he admitted: "Some people do think I'm full of bull. I've always had a bullish arrogance. But it's been necessary to make the success happen." When he left his former wife Caroline for Elisabeth, he was unable to prevent the media turning his personal life into a sport, most notably with Tatler's 1999 portrayal of a "gripping New Establishment drama" called Notting Hill II.

And when he was tempted to set out his position in the world to Vanity Fair, he got his fingers burnt as the writer mocked his "skintight Agnès B leather pants" and suggested that he had accused Rupert Murdoch of having an old-fashioned view of women. Freud had to firefight on his own behalf, claiming he had been quoted out of context.

Since that interview ahead of his wedding to Elisabeth in 2001, Freud has deliberately kept a lower profile and concentrated on what he does best: sitting with a phone to his ear, working his unrivalled network of contacts on behalf of clients.

Last year, he again sold a majority share of his company, this time to the French media group Publicis. He pocketed at least £12m and retains a shareholding of around 33 per cent.

Freud may again be suffering some unwanted limelight but he is in a stronger position than ever. And, as he once soberly observed: "I deserve every ounce of the bad press I get because I have made my trade out of the media. I can hardly complain when I get misrepresented."

How he is related: the Freud connections

HIS WIFE

Born in 1968 in Sydney, Elisabeth Murdoch, was managing director of BSkyB Networks in her father Rupert's media empire and owned two NBC affiliate stations in the US. After breaking away on her own, she is today the chair and CEO of Shine, a television production company.

HIS PARENTS

Sir Clement Freud, the writer, broadcaster and former Member of Parliament, fled with his family during the war from Austria to London, where he later married Matthew's mother. As well as raising five children, Sir Clement spent 14 years as MP for the Isle of Ely. Three years ago, he was elected rector of the University of St Andrews. Matthew's mother Jill reportedly provided the inspiration for Lucy Pevensie from The Lion, the Witch and the Wardrobe after she was evacuated as a child to CS Lewis's home in Oxford.

HIS GREAT-GRANDFATHER

Matthew is the great-grandson of Sigmund Freud, the Austrian father of psychoanalysis.

HIS SISTER AND HIS BROTHER-IN-LAW

Emma Freud, 44, is an established television and radio presenter. As well as presenting her own BBC show Plunder, projects for The Media Show and the health series The Pulse, she has also hosted the Baftas for the BBC and the Turner Prize for Channel 4 as well as working as script editor on her husband Richard Curtis's films, Four Weddings and a Funeral and Notting Hill, the premiere of which was organised by Matthew.

HIS UNCLE AND HIS COUSINS

Uncle Lucian is often described as Britain's greatest living artist, the subjects of his portraits ranging from the Queen to Kate Moss. Cousin Bella, the daughter of Lucian, is an established fashion designer. Cousin Esther, another daughter of Lucian's, is a novelist.

HIS EX-WIFE

Matthew Freud had two children - George and Jonah - with Caroline Hutton, before they separated. She went on to marry Earl Spencer, the brother of the late Diana, Princess of Wales, in 2001. They have a son and a daughter.