The man who likes London too much

As around three million Londoners sweated home on the Tube last night, the man who was meant to transform the capital's ramshackle public transport system flew off on holiday. Bob Kiley left behind him a £4 million legal bill for a failed challenge to the Government's funding plan, an Underground not obviously better than when he arrived 18 months ago and rumours buzzing that he may resign when he returns.

The gossip, when he left a Transport for London board meeting for the airport en route to the millionaire's playground of Martha's Vineyard, was that the unlikely buddy act of the flamboyant former CIA agent and Ken Livingstone was coming to an acrimonious end - with the Mayor casting round for a scapegoat on whom to blame the costly legal fiasco.

At 66, Mr Kiley could be forgiven for abandoning a job where he suffers constant frustration at being denied the sort of untrammelled power he took for granted in similar posts in the US. He is also, say colleagues, doubtful he can deliver major improvements within the funding straitjacket ruthlessly imposed on the Tube by Chancellor Gordon Brown - at least, not enough to safeguard his reputation, brilliantly acquired running New York's subway, as a miracle worker.

In such circumstances, why would a man whose standing cannot possibly be enhanced by remaining in London not take the chance to cut his losses? His enemies smell blood in the water.

If Mr Kiley chooses to up sticks now he will miss out on his best pay days as transport supremo. His basic salary is £250,000 annually for four years. He is also entitled to performance-related bonuses creating a total package over four years of £2 million. It was felt that the job was equivalent to the chief executive of a major company who could easily command more. It also makes him virtually unsackable, because the Mayor would have to pay a fortune to buy him out of his contract.

Mr Kiley's earning power has so far rested on his reputation as the saviour of New York's transport system. During the Eighties he turned it from a graffiti-strewn mugger's paradise into a clean, safe and dependable service. But now doubts are creeping in about whether he deserves credit even for that achievement.

"Talk to business leaders in New York and you will hear them say that Kiley was adept at taking credit for other people's work," says one critic. "But the two cities do not compare, really, because New Yorkers do not use bicycles or buses, which Kiley is now struggling to deal with."

If he does decide to fight on, the biggest factor will be his wife. Rhona Kiley, say friends, is not to be underestimated. "If anyone can persuade Bob not to quit and go back to New York, it is probably Rhona," says one. "She absolutely adores London and the social life they enjoy together - and would fight like a tigress to stay in their house in Belgravia."

The Kileys' £2.5 million Regency terrace, close to Ebury Square, goes with the job. Bought, decorated and furnished by Transport for London, it is one of the most impressive tithe cottages in the country. The couple hold dinner parties regularly around an antique table that takes eight comfortably - 10 at a pinch.

They are silver-service affairs, with waiters and chefs hired for the night to attend to guests, with all the ceremony of an English country house shooting party, although the Kileys themselves adopt a pleasingly informal American mid-West style as hosts.

IN New York, Rhona was a noted charity fundraiser, her contacts book bulging with the phone numbers of the Big Apple's rich and famous. Her networking skills allowed her to swiftly acquire a vast circle of friends in London. She joined London First, the London business group, and has pioneered a scheme which will begin soon for graduates to start their careers teaching in London's inner city schools in return for favourable consideration for jobs with city companies after two years.

Soon after arriving in London, Mr Kiley was nicknamed Party Bob because he went to so many grand functions. "I think he was pretty bowled over, even after being feted for a while in New York," says one TfL insider. "He and Rhona were on the guest lists to everything going, from charity balls to political dinner parties."

One of her admirers says: "I came to London 20 years ago but she already knows far more people than I do, and none of the people she mixes with are insignificant,".

At a recent Guildhall dinner, Mr Kiley was sat next to Prince Andrew. The Kileys also went to the Queen's Jubilee classical music concert, and have been invited to Glyndebourne and the Royal box at Wimbledon. Rhona is the music lover - he would rather watch baseball but he dutifully accompanies her.

One Labour Party critic of Mr Kiley believes the attention went to his head, saying: "The Elephant Man was invited to all the London parties as well - but at least John Merrick realised he was a novelty." Mr Kiley has met all of the main political leaders, with the exception of Gordon Brown - the implacable force behind PPP, who has steadfastly ignored his repeated pleas of "just 10 minutes please".

Part of the Kiley charm - he has bags of it when he chooses but can be rude and devastatingly cutting when angry - is a classlessness typical of what one English observer describes as "the best kind of American".

Critics claim Mr Kiley is a bully. Admirers say he despises officials who say something cannot be done and regards the British civil service as a nuisance. But even his

opponents admit that he knows his subject. "His biggest problem is that he knows too much to get anything done," says one.

Mr Kiley's problem is that, for all his determination to impose his will and vision on his empire, control of the mighty Underground still eludes his grasp.

He will not assume control until London Transport is handed over to the Mayor by the Government when the PPP contracts have all been signed and his friends say that is when he will be able to make an impact on the Tube.

"But I think he will resign," says a prominent Labour Assembly member. "It will end in tears and Ken will use his departure as a lightning conductor to protect himself."

John Biggs, Labour's transport spokesman on the Assembly - who is pressing for an Audit Commission inquiry into the £4 million legal bill - said: "Clearly, he set himself up to defeat the PPP and the failure to do so will be a severe dent."

Steve Norris, the former Tory mayoral candidate, was a Kiley enthusiast but now believes the American has failed to deliver, saying: "I said some time ago I had sold my Kiley shares. Maybe now the light is dawning on people. I don't think he really understands London's problems, which are totally different from New York.

"He lives on the fringe of Belgravia and works in Victoria - that is his view of London. It is not the London of Bromley and Hillingdon."

In a few weeks Mr Kiley will have to decide for certain whether he is truly committed to the city he clearly adores. Friends and enemies alike may be relieved if he chooses to quit.