Even my signature’s worth £200. Does that make me the new Picasso?

When Pablo Picasso was at the height of his fame, his signature was so valuable, he could use it as money.

He'd write a cheque for a meal, say, and the restaurateur would keep the slip of paper with the precious signature rather than cash it. The same thing is happening to Damien Hirst, at 43 almost ­certainly the richest and most famous contemporary artist on the planet.

"Someone in a gallery in New York told me the other day that my signature is worth $350," he says in a still-broad Yorkshire accent. "It's actually something they can define. So that's, what, about £200? That means if I sign a cheque in a restaurant and it's for £150 the cheque is actually worth more than the bill comes to."

He sits back and contemplates this startling fact for a second, vaguely amused by it. "So on that level, yeah, maybe I am in the same position as Picasso." He pauses for a beat. "If you believe all that shit."

Next week his true worth will be put to unprecedented test in an historic auction at Sotheby's on New Bond Street, when 223 box-fresh works — dot, spin and butterfly paintings, animals suspended in formaldehyde, medicine cabinets, meticulous displays of cigarette butts, all dated 2008 — go on sale.

It's the first time a contemporary artist has cut out the "middle man", the gallerists who mediate a sale (and take up to 50 per cent of the proceeds) and it may transform the art market overnight. This is the art-world equivalent of the online music revolution, a smashing of orthodox sales techniques. If everything sells as priced, from this single auction Hirst expects to make £65 million.

The question is: in a jittery market, will he or won't he? What is Damien Hirst, the crown prince of contemporary art, really worth?

In person, he actually looks more rock star than ever. He is dressed in a black T-shirt with a glittery skull motif and wears large tinted glasses. More silver skulls adorn the fingers of both hands. Yet Hirst has never been a prima donna, nor (when sober at least) a pretentious gabbler on the subject of his art.

He has always embraced his fame willingly, and is still fairly blokeish. "Yeah, but I've never farted in front of the Queen," he laughs, for example, when I mention his (long-gone) hell-raising days as the 20-something knave of the Britart pack, falling out of the Groucho Club on week-long benders.

Is he nervous about the sale? Most commentators expect him to sell but if he doesn't, the bottom could easily fall out of his market and send shockwaves through the art world. When I visit the pre-sale exhibition, a lecturer is telling a group of students that "this is like England being in the World Cup Final".

"I'll be glad when it's over," says Hirst cautiously. "I think it's risky, yeah. I think the risk is more in the mind before you do it. When it's just on paper, you're thinking: can I do this? Should I do this? What will I benefit? Will it be any good? How will it be perceived? All that stuff gives you f***ing nightmares. Then we get to this point, where the show is up on the walls and its solid and speaks for itself, and kids are coming in and saying: Wow, I really love that.' And it kind of feels like all the gambling is over."

Hirst has already announced that he will make no more spin or butterfly paintings (where dead butterflies are embedded in pigment and resin, either in stained glass-style patterns, or singly, dotted about brightly coloured, or black, canvases) and this undoubtedly shores up their value. But the prices are still phenomenal, up to £600,000 for butterflies, about £300,000 for dots, and £8 million to £12 million for The Golden Calf, a bull in a tank with golden hooves, horns and head-dress. What will he do if his grand experiment fails?

"I'll probably go back to Devon [where he spends most of his time] and hide a little bit, and then come out saying it was all part of the plan." He grins. "I don't think of it. For me it won't even be a failure if it doesn't sell. That's the excitement, isn't it? You get points just for trying. Whether it succeeds or fails, people will say: Oh my God, did you see what he tried to do?'"

It can only be assumed that Jay Jopling, Hirst's UK dealer at White Cube, agreed to the Sotheby's sale with great reluctance (his gallery stands to lose millions). Hirst is frank: "I was a coward and I told him on the phone. He said: I'm going to have to think about this and call you back.'
"And after a few days thinking he did, and said: You know, actually I think this is going to widen your market.' Everyone has initial fears and doubts and nobody likes change but once you accept that it's inevitable, you look at what it can bring to the table. Jay knows that it's going to bring in more collectors, more clients and maybe widen the market for everybody."

Hirst dismisses rumours of an inventory stockpile at White Cube, the alleged result of an oversaturated market. "Bullshit," he says, good-naturedly. "That was a nonsensical story. I think there are six pieces left from my last exhibition and the gallery does have stock, but it's just normal stock. Everything's selling. I mean, there's a recession coming, I guess, but basically the last exhibition I had at White Cube was the best-selling exhibition ever. We all know things don't last for ever but at the moment things are all fine in the Hirst camp at White Cube."

The largest collector of his work, Hirst reveals, is "probably" François Pinault, the billionaire French businessman who owns Gucci, the Chateau Latour vineyard, and Sotheby's great rival Christies; and has in his collection "about 45" Hirst works. Hirst owns a great deal, and in 2003 bought back 12 early pieces sold to his first great patron Charles Saatchi. The Ukrainian billionaire Victor Pinchuk has been buying steadily since 2000; the designer Miuccia Prada and the art-loving City trader Robert Tibbles own a substantial number. Elton John has a few and David Beckham owns one. "Well, his missus does. 'Er indoors. He bought her one as a birthday present."

But the Sotheby's sale is really aimed at none of these buyers. They can wander into White Cube or a branch of the Larry Gagosian dealership (Hirst's US representatives) and buy a Hirst at pretty much any time.

The buyers at Sotheby's next week may well be a new crowd altogether — the 21st century global rich: from India, Russia, China, the Middle East — which is clearly the whole point of the sale.

Ten years ago, Hirst certainly had the reputation to make this move and break free of his dealers but back then there simply wasn't the breadth and potential of the world market today. Sotheby's and Jopling hope to uncover dozens of hitherto unidentified new buyers next week. It is Hirst's great shop window.

But there's more, too. As he walks around the exhibition, through all the trademarks of his career, Hirst feels "that it's the work of someone who's much younger than I am. I suppose I used to believe that I was going to live for ever and now I know that I'm not. The work I was making was a celebration: we can't lose, nothing can stop us now, that kind of thing. Now it's more a sense of, well, no one gets out of here alive.

"I've started making black butterfly paintings — they were all very bright colours at first — and I've just noticed [the canvases] have got rosary beads, scalpel blades, broken glass on them [too]. It's all gone a bit dark, and then suddenly I thought: Oh well, maybe these kinds of paintings are not the right vehicle for communicating what I'm feeling at the moment. I've mass-­produced things [at his six studio-cum-factories in London, the Cotswolds and Gloucestershire] and I've kind of got to the stage where I need an abrupt change into something different."

Some would say, of course, that Hirst has always been "dark" — his solitary lamb, his sliced animals, his terrible insect-o-cutor, were always preoccupied with mortality, disease and the cycle of life and death. Yet there has always been huge humour to his work, too.

"I suppose having children makes you a bit more afraid as well, but I don't think that's a bad thing," he says now. He and his partner, Maia Norman, have three boys — Connor, 13; Cassius, eight, and one-year-old Cyrus — and own houses in Devon and Mexico (Hirst's manager Frank Dunphy, who puts his client's wealth at more than £500 million, has said that Hirst owns between 30 and 40 properties). When in London, Hirst stays on his houseboat in Chelsea.

Why doesn't he buy a grand house? "My missus won't let me," he replies. "She thinks if I get a big house in London I'll never go home to Devon"

It was the diamond encrusted skull, For the Love of God, that, depending on your view, most recently displayed Hirst's genius, or genius for outrage. Priced at £50 million, one third of it was sold last summer to an unidentified consortium of investors, while Hirst himself "bought" the remaining two thirds. Frank Dunphy now says the skull would be worth an even more jaw-dropping £150 million at auction.

But Hirst has always been an astute self-promoter and businessman, and thinks a lot, unapologetically, about money. "Art can be about money as long as the art outweighs the financial side," he says. "Frank always says: Make sure that you're using money to chase the art and not the art to chase money.' It's advice I think about every time I do anything. I've got money and I use it to have a goal of [making] art, not the other way around."

Then he says something startling: "The other way around is a problem, and we do skirt dangerously close to it sometimes. But in the end we make sure we're on the right side."

When I ask what art he is currently making, or thinking about, he reels off a list of ideas: "I'm interested in magic at the moment, in things like levitation and floating balls and magic that isn't real — illusions, puns, games, secrets." He smiles, unsure how much to tell me. "Come to my next exhibition and you'll see what I'm talking about."

First we have high noon at Sotheby's — and a chance to find out whether his artistic reputation, and extraordinary value, rely on smoke and mirrors or are firmly rooted in the real world.