There are some characters so extraordinary, so defiant of those norms of behaviour that bind the rest of us, that they dazzle and destroy in equal measure. John Stonehouse – British cabinet minister and Czech spy, seducer and betrayer, humanitarian defender of far-off lives and thoughtless wrecker of those nearby – was one such. To read the new account of his rise and astonishing fall, written by his great-nephew Julian Hayes (a lawyer whose father was himself a key Stonehouse casualty), is to be reminded just how far the trail of destruction ran.

The book is a vivid account of how, in the Sixties and Seventies, Stonehouse – once tipped as a future Labour prime minister – betrayed his country, made a mockery of domestic and international law, ripped off investors and friends, humiliated both Harold Wilson and Parliament, shattered his own family and then, when the jaws of his self-made trap began to close around him, organised and executed a fake-your-own-death escape of such breathtaking chutzpah, he later tried to explain it as the work of a second personality living within him.

It was a scandal of almost staggering ornament and dimension. And yet throughout it all, he inspired devotion from the beautiful and mobilised ardent defenders in the court of public opinion. No wonder his presumed drowning off the coast of Florida in November 1974 dominated the front pages. And no wonder Hayes’ book is being serialised by the BBC now.

But the cost, the collateral damage, was immense. “I have very clear memories of the whole thing,” says Hayes, 55, about an episode which reached its apogee when he was a boy of 10 or so. Such was the sense of family betrayal that he was even taken down to Bow Street magistrates court by his mother to hurl eggs at the police van which finally carried Stonehouse to justice. “It had profound effects. My father became remote. My mum’s mental health suffered. She ended up in hospital a couple of times.”

They were not the only victims of a brilliant but brittle man whose towering narcissism shines through the narrative. Here was a man who deserted his wife, Barbara, and three children, allowing them to believe him dead, so that he could start anew in Australia with Sheila Buckley, a mistress half his age. A man who then, when he was eventually caught on Christmas Eve in Melbourne, wrote to his distraught wife from custody: “I would truly love to have someone I can talk to. Do come out and bring Sheila.”

Stonehouse started a new life with Sheila Buckley after faking his death

Credit: Hulton Archive

He displayed the same brass neck with the Czech spies who recruited him in London. Having been given the codename Kolon, and paid the equivalent of tens of thousands of pounds, the material he fed them was so paltry and his broken promises so frequent, they eventually renamed him “Twister”.

Today, reflecting on research that took him from the National Archives in Britain to the archives of the Czech secret police in Prague, via a delicate journey around his own riven family, Hayes says writing Stonehouse: Cabinet Minister, Fraudster, Spy has been “cathartic”. “It deeply affected us,” he says. “I needed answers.”

It is impossible not to begin the mystery of John Stonehouse with what he intended to be its end – the pile of clothes that he left on a Miami beach on November 20 1974. Was it suicide? Heart attack? Shark attack? No one then knew that he had instead swum along the beach, recovered a large suitcase of clothes, dried himself, changed and headed to the airport. Back in his hotel room, police quickly found his old passport. But Stonehouse didn’t need that. He had a new one in the name of Joseph Markham, a dead constituent.

Credit: Tony Wallace/Daily Mail/Shutterstock

Hayes had seen his great uncle just a couple of weeks earlier, at a family celebration at Stonehouse’s grand house near Andover. “My mum always remembers that he wasn’t his usual self,” says Hayes. Rather than animating the party, “he locked himself away in the study”. The only time he emerged was to direct the children down to the cellar, from where they retrieved countless files to feed the bonfire. “I still wonder what we actually put on the fire that night,” he says.

Was it paperwork relating to the web of business projects that Stonehouse had created to fund what Hayes calls his “lavish lifestyle” as his political star faded? Though a Labour politician, Stonehouse “craved” money, keeping several properties, growing used to a chauffeur-driven Daimler, sending his children to private school and supporting not just his family but Buckley, too. In the end, that web of businesses ensnared him – and Hayes’ father Michael, too, a solicitor who was captivated by his uncle and helped him set up the three companies which became the vehicles for Stonehouse’s deception and fraud.

His betrayals seem unforgivable. Yet symbolic of the strange duality that ran through Stonehouse’s nature, the biggest rip-off had begun with what appeared at least to be noble intentions. An ardent supporter of the nascent state of Bangladesh, which he visited in 1971 during its war of independence against Pakistan and raised awareness of the horrors taking place, he set up the British Bangladesh Trust to promote and encourage trade between London and Dhaka. At first, as this unravelled, he shuffled money around – including his own – to maintain a semblance of propriety. Only when such shenanigans in turn became unsustainable did his thoughts turn to looting his ventures and disappearing.

“Stubbornness was his problem,” says Hayes. “Once he’d set off down a pathway, his ego stopped him from saying this isn’t working.”

Julian Hayes is the author of Stonehouse: Cabinet Minister, Fraudster, Spy'

Credit: Clara Molden

Too much forgiveness is hard, given Stonehouse’s pattern of offending. The reason, after all, that he had to sail too close to the wind in business, was that he already had done so in politics. His treachery with the Czechs was revealed by defectors and, though his denials were believed after an all-too-chummy interview, Wilson demoted him from his cabinet. Spying, which Stonehouse had imagined to be an easy way to make cash, ended up costing him his career in Westminster, propelling him towards fraud and catastrophe. “It all came tumbling down as a direct result of his fraternisation with the Czechs,” says Hayes.

Was Stonehouse mad and bad, or well-intentioned and buccaneering, driven off the rails by bad luck and self-indulgence? As with his trial, which ended with an eight-year sentence, the verdict has remained split. Those closest to him, including his wife, Barbara, Michael and Sheila, who became his second wife and with whom he had a son, are still alive and have their own views of the carnage he wrought.

From a greater distance, Stonehouse’s story seems like some Homeric tale of hubris and nemesis, never destined to fade. Indeed, its resonance only grows stronger in our own age, whose technology amplifies the reach and ruinous might of the demagogic narcissist. The danger and fascination of a man who resolutely ignored the rules and was happy to stake the fortunes of others in his own grandiose bets, endure to this day.

It’s not always a happy legacy. “There is,” says Hayes, “always going to be that shadow.”

Stonehouse: Cabinet Minister, Fraudster, Spy by Julian Hayes (Robinson, £25). Order for £19.99 at books.telegraph.co.uk or call 0844 871 1514