Has the Groucho lost its glitz?

Back in the late Eighties, when the Groucho Club on Soho's Dean Street was in its heyday, one of the regulars remembers walking into an upstairs room and seeing Bob Dylan chatting to Dave Stewart. Downstairs, Mick Jagger languished on a sofa with an "ambitious" young girl.

Recently, the same member was back with the 19-year-old daughter of a friend on a celebrity-spotting exercise. Leaving after what he thought was an unfruitful hour, he apologised. "What do you mean?" the teenager replied. "Half of Steps were there and I saw someone from Blur."

The Groucho Club has changed. Founded in 1984 by Tony Mackintosh of the chocolate fortune, who persuaded a small circle of literati to invest £1,500 each, the private members' club quickly became the haunt for London's in-crowd. The food was never great and the drinks were ludicrously expensive, but it had an intimate atmosphere, the staff knew everyone's name, it offered after-hours boozing peopled with an unlikely coupling of media stars and celebrities. It was an instant success.

Every high-pitched word uttered by Julie Burchill, who sat nightly on a sofa in the corner frittering away her mega-salary, was lapped up by eager young things keen to emulate her meteoric climb up the Fleet Street ladder. Upstairs, John Diamond, Keith Allen and Stephen Fry played poker into the early hours. Tales of coke-driven excess abounded, and the Groucho became a byword for glamour.

Now, according to the regulars who gave it its early kudos, the grande dame of clubs has become a ghost of her former self. Damien Hirst has left in a strop - he doesn't like the new ownership or the direction the club is taking. Members talk of the "corporatisation" of a once-bohemian club, and there are reports that PR guru Matthew Freud and another chocolate heir, Joel Cadbury, who bought out the club last year for a reported £11 million, have fallen out.

"Matthew was going to deal with the business side, while Joel did front-of-house," says one insider. "Now we're expecting an announcement within a matter of weeks that one of them will buy out the other."

Members were also horrified to receive a letter recently informing them that they will no longer be able to conveniently "forget" their bill after a night's boozing and have it sent to their home address - a system that effectively provided free credit and allowed anyone who was on their uppers to manage their cash flow without losing face.

"Now everyone has to have their credit card swiped as soon as they enter the building," says one member, who like others doesn't want to be named for fear of expulsion. "The excuse is that the staff can't be expected to remember everyone's name - which was the foundation stone of the original Groucho. Everyone hates Matthew Freud for what he's doing. He's become this 'gangster' figure who's taken over, and the regulars are very, very unhappy."

Some, however, question whether it is the club or its members who have lost it - the original highliving media crowd who drank their way into oblivion there in their twenties and thirties are now in their forties. Writer Deborah Orr, who is married to former Groucho club habituè Will Self, recently resigned her membership.

"It was just because I wasn't going very often now that I have kids," she says. "There was a time when I was into doing a lot of socialising. Now that I'm not, it doesn't seem such a great place any more. I did go the other week, and it was pretty bad. The food has always been dreadful, but no one minded because everybody was on cocaine. It's hard to know whether it is the great institution declining or whether it is me that's declining."