Tim Waterstone is a very happy man. The day before this interview, his consortium, HMV Media, had bought back the company he had founded in 1982 from W.H. Smith. The new group will also cradle Waterstones other baby, the children's retailer, Daisy & Tom.

Mr Waterstone shook up the dusty world of book selling in the 1980s when he created Waterstones bookshops. Hailed as a retail visionary by some, others feel he is too much of a risk-taker for the business world. They point to the fact that the Waterstones chain only showed a profit after he sold the company to W.H. Smith.

Mr Waterstone freely admits that he likes taking risks and that he is not 100 per cent business-minded. "I'm useless at all that financial stuff," he confesses. What he excels at is having a good business idea once in a while. Enough to make him a rich man. The old Waterstones business may not have made any profits, but he did realise the sum of £42 million sterling when selling out to W.H. Smith, receiving £10 million personally.

He does not fit the stereotype of the workaholic businessman, either. "I hate working evenings," he says, leaving his Kings Road offices at six most nights. And he never takes work home. Bathing his two children is his idea of bliss, not poring over facts, figures and flowcharts.

He claims to be able to totally switch off from work at home. "I like reading. And I really, really like writing." So much so that he bemoans the fact that the recent merger took up too much of his time, making him fall behind with the writing of his latest novel. This is part of a six-book deal he has with Orion. "But I'm going to get back to it tonight," he vows.

Another requirement for the stereotypical entrepreneur is a couple of flashy cars parked in the garage. "I'm afraid my wife Rosie and I both have Corsas", the small Vauxhall car.

Asked if he has ever fancied walking into a showroom and driving out with a Ferrari, he admits: "I've been through that, when I sold Waterstones I went around acting like I'd won the lottery for about six months. I felt very ashamed afterwards," he adds with a laugh. How about houses dotted around the world? "All I have is a house in London. I don't really like owning houses. It's the responsibility of it. One house that is the family house; that's great." With two small children, he says his house is comfortable for living in.

But he confesses to recently starting an art collection. "We're going to move house soon and come back to Chelsea; its one of the things we promised ourselves for the new home." He likes the artist George Young and has bought three of his paintings.

Does he have any other objects that he would like to start collecting? "Just shares in this new company," he says with a smile. But he does have personal possessions that he treasures: "The watch that Rosie gave me when we got married nine years ago, and two things from my father a rose bowl and a silver drinks tray."

He is also very passionate about the Labour party and has played an active role in fundraising and campaigning.

Favourite charities? "I do quite a lot for Shelter, I'm very interested in them and do some fund-raising. I really enjoy it and I like the Shelter people. But I do no more charitable work than anybody else." He was recently invited by a friend to get involved in raising funds for a women's hostel in Maryleybone, London, for which they managed to raise £2.5 million, but he says: "I'm no great philanthropist and I don't tend to write cheques for everything in sight."

Surprisingly, perhaps, for a businessman who leads a risky professional life, he never gambles. "The last time was 20 years ago when I put five quid on a horse on the Grand National simply to please our Scottish nanny who knew the trainer. But I do like being on the edge of danger work-wise."

Tim Waterstone makes sure he is well advised when it comes to money. "I like to know how well I'm doing and how much I'm worth. I'd like to leave a decent stake behind me. I don't know why particularly, because I feel it probably ruins children's lives more than improves them, but I'd like to hang to as much as possible."

So what are his plans for the future? "I really want to turn the new company we formed into a major retailing group; I'm determined to do that. I'm sure we'll buy other things. Then, that will be the end of my professional life."