“I'm definitely a control freak. No question. And I'm not interested in second place”

Although he went bust at the age of 26, he refused to give up, started a telecoms business, and at 41 is now a habitué of rich lists and one of Britain's best-known businessmen thanks to his appearances as a panelist on Dragons' Den. But it all started with those tennis balls, which is why he has incorporated them into his coat of arms; the College of Arms recently invited him to design his own heraldry.

"It was quite a proud moment," he says. "I have included things that mean a lot to me. So on the shield there are five round circles. Those represent tennis balls, and the reason there are five is I've got five children. On top of the shield there's a dragon's foot holding on to another tennis ball, and above that there's a bolt of lightning, because I was in communications. Then underneath I've put in Latin, Make dreams reality'."

Does he display the coat of arms anywhere? "Yeah, I have it on my website. And we're looking at launching a range of clothing. I design my own suits. You'll see things on them that people have said could never be done in suits."

To prove his point, he twists a lapel and proudly shows me something incomprehensible to do with the button hole. "All the lining is very different as well, and there is no belt - I've gone back to the old-fashioned claspers on the trousers. And I wear, always," - here he wafts an ankle - "my famous stripy socks."

Along with his friend Simon Cowell, Jones has developed a US TV show called American Inventor which has become a big hit for ABC. He says the channel's switchboards are constantly jammed by people desperate to find out where he gets his socks. In Britain, we are apparently more concerned with the provenance of his ties, and thus he plans to offer these as part of his range of clothes.

"I've got my 10 Golden Rules of entrepreneurial success so I want to create 10 ties. You would put on your yellow tie when you want to have vision, or if today's about getting a deal, well, you wear a powerful' tie and on the back it has Determination' - rather than Versace - and it gives you a little summary."

Goodness. This is not at all what I expected of Jones. Motivational ties seem the sort of whimsical idea that would get short shrift on Dragons' Den, especially from Jones whose shrift is the shortest and who specialises in put-downs so catty they have to be spayed before leaving his mouth.

I meet him on the set of his new ITV1 show, Tycoon, which is being filmed in a converted warehouse on the south bank of the Thames. Jones has selected six entrepreneurs to live and work there for 10 weeks, and has invested £10,000 of his own money in each of their business ideas. The winner gets to keep the profits made by all six companies.

It sounds to me like Dragons' Den meets The Apprentice meets Big Brother, but hyperbole is Jones's default setting and he likes to talk the show up. "We've gone right out there with Tycoon to push the boundaries of what can be done. For us, it's not just a new programme. You are about to enter a completely new era of television making."

I catch up with him at the end of a morning's filming and we go out together for lunch at a nearby restaurant. He is a daunting figure to walk alongside - six foot seven and built powerfully. High above me, the lit tip of his Marlboro glows like a distant comet; you could sail down the Thames in one of his shoes and weigh anchor with a single bejewelled cuff link. Being so big gives him confidence which can be helpful in business meetings, although he is forever bashing his head on the rafters of his local pub.

We were originally supposed to meet the week before, but he came down with something nasty - "Not nice to say, but it was coming out both ends" - and then spent a few days in Los Angeles promoting American Inventor. He looks well now, though beneath his Californian tan I can see a few lines on his face, as though a child has drawn in the sand with a stick. He turned 40 in March last year but isn't at all pleased when, early in the conversation, I bring this up. "No comment," he says, miffed.

I reassure him that I am just trying to find out whether he considered it an important milestone. After all, his life has changed so much since Dragons' Den first aired in early 2005; he has gone from being unknown outside the business community to being really quite famous on both sides of the Atlantic.

"What are you saying?" he demands. "That I'm having a mid-life crisis?"

"Are you?" I ask.

"No. I don't think about age. I really don't." He pauses and reconsiders. "Actually that's not true. I do think a little bit about age. I look at my hair and I think, Well, I need a little colour here and there.' I'm conscious of my age. But 40's still young. I don't think it's old."

"No," I say. "I'm not trying to suggest it is."

"Well, I get the feeling that you are, though."

"No, not at all, it's just ..."

He interrupts. "How old are you?"

I tell him I'm 33.

"Are you really? God, you look older than that."

Having had his little dig, he relaxes and tells me that he is actually rather enjoying his age. For his birthday he hired Necker Island from Richard Branson and flew 30 friends out to spend the week celebrating.

Jones grew up in Berkshire, near Slough, and sounds rather like that town's most famous son, David Brent, both in his accent and some of the opaque officespeak he sometimes uses - "When a gladiator stepped into the ring, they delivered 99 times out of 100."

For a while he attended a private primary school. Although his parents found it "financially crippling" to send him there, he couldn't relate to the other children. "Culturally, I didn't get their lifestyle. They were talking about going off and watching their dad play polo, whereas I was watching my dad going to work."

He was miserably unhappy and on a few occasions played truant and walked two miles into Windsor to his father's office where he felt more at home. Telling this story he plays it for laughs - "I was this little boy knocking on the door, saying, hello, me again," - but admits that it is actually quite a sad picture.

His father, David, ran a small air-conditioning business and as a child Jones would spend happy hours sitting in his father's chair, picking up the phone and pretending to issue orders. He'd also boss the secretary around, which took some doing as his father didn't have a secretary.

This wasn't just an idle fantasy though. At the age of seven, Jones decided that he wanted to run his own business. He believed that he would one day be a multi-millionaire. His friends dreamed of becoming spacemen or cowboys, but for him becoming seriously rich was a serious goal.

His parents didn't have much money and talked about the lack of it all the time. "For me, it was a driving force to make sure I never had those conversations." He grew up full of frustrated desire, envious of the things his friends owned which his family could not afford; he mentions a particular Casio watch, and I notice he now wears a swanky Breitling. However, he didn't resent his mother and father. "My parents aren't just loved by me, they are adored by me. I know that sounds like sentimental nonsense, but it's not. They instilled in me that you can have your dreams, you can go out and do it."

Jones watched them work extremely hard yet struggle to make ends meet, and he made a decision: "I'm not going to live my life like that. I am going to have choices. And if I want choices, I need to make money."

He started his tennis academy aged 17 (he says there is no question that if he hadn't become a businessman he would have been the number one tennis player in the world) and by his 21st birthday his next business, a computer company, had become highly profitable. At 22, he married his first girlfriend, Caroline, and they had two children. However, he went out of business four years later when companies that owed him money went bust; he had failed to make adequate credit checks or insure his business.

"It felt like going from light to dark literally overnight," he says. "Your whole life just collapsing around your ears. It gives you a feeling of solitude, you're on your own, you've made those mistakes and you've got to live with them. But the amazing thing was, I didn't languish in my inability to succeed. Even though for many months I didn't have a car or anywhere to live, I never stopped believing that I'd get it back. I honestly didn't. There was not one day when I didn't believe I'd be a multi-millionaire again. I just didn't know how I was going to do it."

He owned a 12-foot square office on a trading estate and lived there for six months, washing in cold water every day. Around this time his marriage ended. Was that related to the collapse of his business? "No. For quite a while I was finding it increasingly difficult in a relationship anyway, but it couldn't have been worse timing and it was the final straw."

Jones refuses to use the word failure in relation to business. He prefers the term "feedback" as when things go wrong he can learn something that will help him in future. His split from Caroline, therefore, provided plenty of feedback. "I learned so much from that marriage, for sure. I've been in a relationship now for 12 years so I clearly learned enough."

Such as? "Oh, I learned to communicate far more effectively. When I first started in business, because I was young and naive, I felt I had to protect my wife from what was going on." That meant when the business went wrong, it was a shock to her. "For me that's really helped with Tara, my girlfriend. She knows exactly what I'm going through and what I'm having to do. So I get encouragement from her."

Jones lives with Tara and their three children in Surrey. He has established a charity, Forgotten Children, which helps groups of needy kids including those caught up in acrimonious divorces. "I went through a lot of frustration over visitation rights to my children. The law is ridiculously precipitated towards the female, which is fundamentally wrong. It's an old staid law that unfortunately has remained unchanged in this country. So the manipulation of not being able to see your kids is conducted every day and that annoys me."

After his business collapsed, Jones got back on his feet by working for a telecoms firm. In 1998 he struck out on his own again. His new company Phones International supplied Ericsson equipment to a range of clients. First year sales were almost £14 million. Jones now has a portfolio of businesses worth around £200 million, including the television production company that has made Tycoon. Does he ever worry about losing all his money again? "No, I've created a safety net so I don't have to ever go back to driving around in a Ford Fiesta."

It's clear that by anyone's standards Jones has enough money. He doesn't actually have to work, so why bother? He says he doesn't know what he'd do without a job, but what about daytime telly? He could get into watching Fern and Phil. "No, if I saw that, I'd want to get out and make daytime TV better." As it is, he has his hands full with regular TV. Jones has taken to his new celebrity life like a colossal duck to a pleasantly sun-dappled patch of water. He delights in going out to dinner with Jordan and Peter André, and is pleased to call Jay Kay and Sarah Ferguson his friends. The only downside is having to spend time filming Dragons' Den with Duncan Bannatyne, the Scottish businessman who has become something of an on-screen nemesis.

"Duncan asks the sort of frustrating questions that my children sometimes ask me," says Jones.

"They ask the most ridiculous stupid question that has no relationship to what's going on. I could be doing colouring with my Natalia and she'll turn around and ask me a question about a book that's not related to the task that she's doing. It's because her mind's somewhere else. Well, Duncan is like my five-year-old. He asks questions totally unrelated to the person that's standing in front of him. So I get frustrated with him and it shows."

Bannatyne recently slagged him off to a newspaper for getting highlights put in his hair. Jones shakes his head at the mention of this. "When you see the transformation of Duncan over the years that he's been on Dragons' Den, it's very dangerous to start talking about looks. He looks a lot better, doesn't he? It's amazing how he's broken the ageing process. Maybe it's the water up in Scotland that's helping. It's taking lines out of his face, putting hair on his head and giving him white teeth."

Mr Jones clearly has a devil in him. But who can begrudge him a little fun? He is currently working 17 hours a day, compared to his usual 14. Like a toddler refusing to go to bed, he hates that he has to sleep at all. "It's really, really annoying," he says. "If somebody asked me, What would be your best future invention?' I'd say A tablet that keeps you awake all the time and doesn't affect your health.' My biggest issue with my life is time. I'd love to be able to control it and one day I'll find a way how to do that. I want to be Doctor Who."

He is currently juggling umpteen projects, but as the father of a young family, wouldn't he rather spend more time with his kids? "I do that as well. As crazy as this may seem, I go and finish my work here and a couple of times a week my driver will take me home. I'll read a story to my children, go back into the room and give Tara a kiss, put a suit on, get into the car and my driver brings me back into London for my dinner appointment. I go out of my way for an hour and a half purely to do that." He gets home at one or two in the morning then is up again at six so he can see his children before work.

Can he imagine being a stay-at-home dad? "No. God, I'd be bored to tears. I really would. I'd be so frustrated I'd turn the house upside down three or four times a week. I'd be running an internet business, I'd be doing deals behind Tara's back."

This workaholism is a symptom of his need to feel in control. "Yes, I'm definitely a control freak. No question. I couldn't do what I do unless I was. I'm a perfectionist. I want to do everything, I want to be the best, and I'm not interested in second place."

He has a lot of ambitions left to fulfill. One is to establish what he calls a Tycoon Academy, an institution in which young Brits will be taught to become entrepreneurs. He intends to spend around £10 million of his own money on this, and hopes to persuade Gordon Brown - whom he knows personally - to put up the rest of the funding.

I had wondered whether he was interested in politics. Would he consider standing for Parliament? "I'd probably only last two minutes because I'd get on the screen and tell Britain exactly what's happening and I don't think they'd want that," he says.

"I'd be far too honest and brutal. I wouldn't mess around trying to upsell the general public that the National Health is fantastic and we're not really in that much of a deficit. Rather than pussyfooting around, I'd say exactly where we are, how it stands and what we're doing to change it. But if Britain ever wanted to put me in as Prime Minister and get me to sort the country out, give me five years and I might consider it."

Prime Minister? It's a childish fantasy, but I think he's half serious. There is a touch of Peter Pan about Peter Jones, almost as if the seven-year-old who imagined becoming a multi-millionaire was so focused on his goal that he forgot to grow up in the meantime. Of course, those qualities which are forgivable in a child - ego, hyperactivity, rudeness and an appetite for more, more, more - are less welcome in an adult.

Still, like him or loathe him, you've got to admire his balls.

Tycoon begins on ITV1 on Tuesday at 9pm. Tycoon: How To Turn Dreams Into Millions is published by Hodder & Stoughton, £16.99