Plot to control Square Mile

The ancient halls of the City of London throw open their doors to the voters on Monday as the Square Mile stages its local election. The process of voting members on to the City's council is an annual affair, and usually a sleepy one - but not this year.

The elections have been galvanised by talk of an extraordinary plot to seize power, with an audacious bid to field more than 60 candidates loyal to a newly-formed political group which seeks to overturn the City's longestablished tradition of political independence.

The group wants to revolutionise the way the City is run - starting with a massive sell-off of its £550 million property portfolio. And the man behind the idea is a businessman who has been vilified for running a scheme in which ancient laws have been used to demand large sums of money from householders over access rights to their home.

According to a well-placed source, the plan is the brainchild of Michael Farrow, described in Parliament by a campaigning MP recently as a " parasite". Labour MP Paul Flynn was referring to Mr Farrow's practice of demanding money from people whose homes adjoin what was previously thought to be common land, but which he now appears to own.

His actions have prompted widespread criticism, not least because what he is doing has been ruled to be legal. In 1986, Mr Farrow, an expert in ancient titles, bought the Lordship of the Manor in the tiny hamlet of Newtown, on the Hampshire-Berkshire border, from the Earl of Carnarvon for £4,200. He quickly sold the title, for £12,000, but retained what he claimed were rights to Newtown's 200-acre common.

Over the next 12 years he campaigned to persuade the Land Registry that this gave him ownership rights over the common - and he succeeded. In the summer of 1999, his company, Bakewell Management, sent out demands to more than 100 families whose homes are on the common or reached by crossing it.

Bakewell was demanding six per cent of the value of their homes. If they did not pay up promptly the figure would rise to 10 per cent.

"It was devastating - a bolt from the blue," one of the homeowners, Merton Vaslet, an 84-year-old retired sales director, says. Mr Vaslet and his wife Brenda, 74, have to cross a 10ft-wide strip of the common to reach their home. So far, they have paid Mr Farrow more than £10,000 for the privilege.

"We fought long and hard against it," Mr Vaslet says. "But in the end we had no choice." Other families at Newtown were forced to the same decision. But for the intervention of local MP, Sir George Young, their bills from Bakewell Management would have been far higher.

He managed to secure an amendment to the Countryside Bill that limited the charge to two per cent of a property's value. Even this is causing despair to many who can't afford to pay, Mr Vaslet says.

At Newport in Wales, in Paul Flynn's constituency, one of Mr Farrow's associates, Mark Roberts, the self-styled Lord Marcher of Trellech, is attempting to extract up to £100,000 from residents whose homes are on land he says he owns through acquiring the lordship of the manor.

"It is the most callous, calculated act imaginable," Mr Flynn says. "People have been made ill with worry over it. If they don't pay, he puts a charge on their home so they can't even sell. Many are elderly and they simply don't know what to do."

At least four of Mr Flynn's constituents have already paid up sums of around £20,000. "They were told it would cost them more to fight it in court," he says.

Similar schemes are being tried in other parts of Britain, he told MPs recently. "Mark Roberts and Michael Farrow are parasites feeding off others," he said in an adjournment debate in Westminster.

So who is this man who has plumbed Britain's ancient feudal laws for profit and now wants to revolutionise the running of the City of London? He appears to be an unlikely revolutionary. Michael Farrow is 70, a bespectacled, avuncular figure who lives in Kensal Green.

He has had links with the City for many years and, at various times since 1983, has been a member of the local council. He belongs to a leading livery company and he is active in the Westminster and City Conservative Association. In this, there is a clue.

Mr Farrow is co-author of a document entitled Blue Dawn: Change is Our Ally. It reads like a Conservative Party manifesto for taking control of the council. The problem is, the Conservative Party wants nothing to do with it.

There is a good reason for this. The Court of Common Council, the elected body which runs the local authority, the City corporation, is in most respects, exactly like any other local authority in Britain. It runs services, collects council tax, looks after roads, licensing, security and has a police committee - but it does not have party politics. All elected members are independents, in keeping with a long tradition that has the support of all the main political parties, including the Conservatives.

Successive governments have supported political neutrality in the City because of its unique role as the nation's financial centre, playing host to foreign financial institutions. In 1989, Parliament excluded the corporation from legislation regulating political activity on local authorities.

"It has always been thought that if the City were run on party political lines it would diminish its credibility," a spokesman said. "Political independence is considered vital to the way it functions as the world's leading financial centre."

Mr Farrow does not agree, apparently. His Blue Dawn manifesto seeks to turn back centuries of political tradition and impose a new regime. The people he chose to help him achieve this are all like-minded Conservatives, among them Peter Jennings.

Mr Jennings is an affable PR executive and writer who describes Mr Farrow as "a good friend". The two men are partners in the Blue Dawn venture which, for reasons of expediency, is now called the City Candidates Group. Behind this innocuous-sounding name is something that has been identified by some at Guildhall as an insidious threat.

And the methods used by Mr Farrow and Mr Jennings to try to capture control prompted the current City leaders to take prompt and drastic action.

Michael Snyder, who heads the Court of Common Council, says that one man who had been put forward as a Blue Dawn candidate had "no idea" he was standing for public office. Others, he says, had been told they would be paid £8,500 a year if they were elected.

Inquiries by City election officials revealed that more than 60 individuals had been nominated to stand for Blue Dawn. If all had been elected to the 108-strong Common Council, they would have assumed immediate control - a prospect that appalled Mr Snyder.

He told members recently that he had learned that Blue Dawn proposed to privatise the City Fund investment property estate, valued at more than half a billion pounds. He said: "This beggars belief ".

As reports of Blue Dawn's electoral mobilisation poured into the Guildhall, the corporation decided to act. Just after nominations closed at the end of last month, officials invoked a property law dating back nearly 50 years, to bar 35 people standing for Mr Farrow's City Candidates Group.

"It was a dirty trick to try to stop us," Mr Jennings says. "That law has been ignored for years - they pulled it out at the last minute." Mr Jennings says candidates were told about the tenancy rule 90 minutes after nominations closed.

But he says the corporation's move would not stop his group. "We still have 17 candidates in 10 wards," he says. "If we can get a dozen people elected we will get support from other members of the Common Council. We know many are sympathisers."

Mr Farrow is certain to be re-elected. He is standing unopposed in the ward of Farringdon Without. If there is a sudden influx of new members from his group he can be expected to organise a caucus. Mr Jennings said this would make it impossible for the Conservative Party to refuse recognising it as an official Conservative grouping.

That may be an optimistic judgment. Inquiries at Conservative Central Office indicate that the party is content with the status quo in the City and has not welcomed the efforts of Mr Jennings and Mr Farrow to force it into a change of policy.

And among other candidates in Monday's election - those who describe themselves as "genuine independents" - there is outrage over what many see as a blatant attempt at entryism.

"This is something you associate with the hard-Left," Robert Duffield, a corporate security consultant standing in the ward of Farringdon Within, says. "On the face of it, this is an attempt by a well-organised group to overturn longstanding democratic custom to gain power for their own political ends."

It was a point I would have liked to put to Mr Farrow, but he did not respond to requests for an interview. It may be that he is preoccupied by other matters. The Law Lords are currently examining an appeal against Mr Farrow's lordship access rights.

If they decide against him, his title venture will become, as it were, history.