Conrad Black: His father warned him not to gamble, but has he lost a high-stakes game?

When Conrad Black was a young boy growing up in Montreal, he came home one day to find a new addition to the family. There in the drawing room was an old-fashioned one-arm bandit. His father had installed the fruit machine in order that Conrad should know an important truth: that gambling makes sense only on the stock market or in the board room - never in the casino.

Black junior bought his first shares, $60 of General Motors at the age of eight. History does not recall the return he enjoyed on this investment - but it clearly gave him a taste for business.

It was a lesson that Black, who was to go on to become a press baron with titles across the world, was to take to heart. His Hollinger International empire now encompasses newspapers in the United States, Israel and Britain as well as his country of birth.

But it was when he seized control of the Telegraph group in 1985 - and went on, as a result, to pick up a seat in the House of Lords - that he felt he had arrived as a proprietor. But yesterday he was forced to give up control of the paper, after nearly 20 years. He is officially to stand down on Friday as chief executive of Hollinger International, the Telegraph's parent company.

Lord Black of Crossharbour's move followed an internal inquiry which revealed that he and fellow executives had received more than $32m (£19m) in unauthorised payments. The disputed money resulted from the sale of Hollinger papers to rival companies which then went on to pay Lord Black and the other directors "non-compete" payments to secure a promise that they would not launch competitors in their territory. Shareholders in Hollinger International felt the payments should go to Hollinger itself, rather than be pocketed by the directors.

The internal committee, set up by Lord Black amid complaints that he was treating the company as a personal fiefdom, said yesterday that he and three other directors had agreed to reimburse the company for the full amount of the unauthorised payments, plus interest, by next June.

Sources at the Telegraph were stressing that though the payments were unorthodox, they did not believe them to be criminal. A spokesman at the Securities and Exchange Commission, which regulates Wall Street and found inaccuracies in company reports, refused to say whether or not it had contacted the police.

Conrad Black was born into a prosperous home as the Second World War was drawing to a close. His father, George, was the president of a big Canadian brewing company until, betrayed by his colleagues, he was fired at the age of 47. It is not in the Black genes to accept defeat in business. Black senior went on to gain a fortune playing the markets.

His experiences at the hands of colleagues he had considered allies left him bitter, though. His son has recounted George Black's final words to him: "Life is hell, most people are bastards and everything is bullshit." Tragically, as soon as he had delivered these words, Black snr suffered a seizure and slipped down a flight of stairs. He was taken to hospital but never regained consciousness.

It is episodes like these that shape men. It is men such as Lord Black who take them to heart. He never wanted to be on the losing side again.

Urbane, intelligent and brusque, Lord Black likes winning. His taste for it was already in evidence when he left the French-speaking university in Quebec, by which time he had acquired two local newspapers: the Eastern Township Advertiser and the Sherbrooke Record, both in Quebec.

It was at university, where he studied history and political science, that he also picked up another life-long passion. He is a published historian, said to be able to name every single galleon in the Spanish Armada. He has recently published an exhaustive study of F D Roosevelt, whom he describes, perhaps admiringly, as having "insatiable ambition" and a far from consistent relationship with the truth: "He couldn't lie straight in bed."

Lord Black gained control of the Daily and Sunday Telegraph in December 1985, from the Berry family, who had owned and run the paper for years in a gentlemanly but ineffective manner that appealed to staff but not to students of the balance sheet. Lord Black came in initially as a junior investor but edged out the Berrys. He knew he liked owning newspapers. The industry carries with it far more influence than other trades, albeit that the financial returns are not often as impressive.

Being a newspaper boss meant a seat at high table, a chance to mingle with the most important decision-makers and to shape the debate. He is a leading member - there is no other sort - of the Bilderberg Group, the ultra high-powered think-tank that either cooks up plans to run the world (if you believe the over-heated conspiracy theorists) or merely makes its members feel as if they might be able to (if you believe the more sober analysts).

Lord Black has, as a result, made friends with prime ministers, and moves in the same circles as presidents. He enticed Henry Kissinger, Richard Perle and Lord Carrington into his circle - as well as some rather less conventional luminaries, such as Mohamed Fayed and the late Sir James Goldsmith. "The list [of Lord Black's friends] is certainly not my definition of the great and the good," said Sir Peregrine Worsthorne, once his editor at The Sunday Telegraph. "Conrad bestrides a very small world like a colossus."

Lord Black inspires mixed emotions among his staff. "Some people here quite like him - he is larger than life, he speaks his mind, but there is also a feeling that under him the Telegraph has not been particularly well funded," said a source yesterday.

His feelings for his staff may be a little more clear cut. A Telegraph employee who has observed him at close quarters for a number of years told The Independent recently: "The fact of the matter is, unfortunately, that Conrad has a real contempt for journalists. "

What is beyond doubt is that he has used his titles in Britain and elsewhere to push a world view that he feels gets a rough deal elsewhere in the media. His pet subjects are Europe (he is anti), America (pro), the war on terror (pro) and Israel (pro). He is unimpressed by what he sees as government meddling in the market - and recently described the BBC as "pathologically hostile to the Government and official opposition, most British institutions, American policy in almost every field, Israel, moderation in Ireland, all Western religions, and most manifestations of the free market economy". The corporation was, he declared, "the greatest menace facing the country". Back on earth, senior Telegraph executives, including Mr Moore's successor Martin Newland, gathered for a crisis meeting. One of the quandaries they were dealing with - not the most crucial, but perhaps the most amusing - was whether or not to run a fulsome review of Lord Black's FDR biography on the paper's opinion page, the second highly positive review of the book to appear in the paper.

For Mr Newland, the crisis is cruelly timed: he was appointed just four weeks ago and his position is bound to come into question once a new owner takes control. But he issued a steady-as-she-goes message to staff: "It is business as usual for us. That is the only attitude we can take."