A mock-up of a Sun front page is framed on Piers Morgan’s wall: “Mirror, Mirror on the fall”, chortles a headline, showing the collapse of Saddam’s notorious statue superimposed with Morgan’s face: “Another shady regime is set to topple.”

And boy, were they dancing in the street — particularly Downing Street — when the Daily Mirror underwent regime change and its editor, Morgan, was ousted. His guerrilla resistance to Tony Blair’s invasion of Iraq led him to publish photographs of mass deception, purportedly showing British squaddies urinating over captured Iraqis.

Their exposure as fakes not only allowed the government to steal back the moral high ground over Iraq, but put British soldiers in line for revenge attacks. Morgan, 39, was disgraced and frogmarched from his paper palace.

But in this, his first interview since his overthrow, he fires back — claiming British troops are to be prosecuted for the abuse and even murder of captured Iraqis. Oh, and that Blair “told me privately that his real motive (for his alliance with President Bush) was to restrain old Dubya in his Stetson and stirrups”.

Defeat has certainly been kinder to Morgan than Saddam: we hunt Morgan down to his riverside lair (not the Tigris but the Thames at Chelsea) where the deposed newspaper dictator is thought to have suitcases stuffed with cash: a £1.7m payoff from the Mirror and a £1.2m deal for his memoirs. Rarely can defeat have tasted so sweet. If an outgoing chairman of Marks & Spencer had trousered such a payoff, wouldn’t the Mirror have railed against fat cats being rewarded for failure? “I don’t see myself as the person who put the wrong trousers up for sale and copped an early bath. Besides,” he adds, “I’m not taking lectures from a lowdown gossip columnist.” Er, Piers, didn’t you start as a gossip columnist? “Yes,” he cackles. “All the best journalists do.”

The great — or terrible — feature of Morgan is his refusal to take anything too seriously. “Running newspapers is not life and death mostly; it’s a great laugh,” he says, having seemingly forgotten the Queen’s Lancashire Regiment’s rebuke: “It is time the ego of one editor is measured against the life of a soldier.”

But hey, it is such chutzpah that made Morgan. Once, when I telephoned him with a damaging story, he threatened I would never work again. When I told him I was writing it anyway, he laughed and chatted away like an old mate. Before the interview when he heard I was coming to talk to him, Morgan said: “Jasper? He’s been bloody rude about me.” Then he laughed and said: “Bring it on.”

So if you are looking for repentance, you’ve come to the wrong place: “Running a risky, scoop-driven news agenda, you will drop clangers. In the current environment nobody should doubt how much balls that takes.” Morgan’s balls have never been doubted. The boy has cojones. The debate has been about his brains, prompting his nemesis Ian Hislop at Private Eye to style him Piers Moron. Not only Hislop, but Morgan’s old duelling companion Jeremy Clarkson are in his sights for the memoirs: Morgan promises these will include a “dossier” on Hislop: “I want him to have long, sleepless nights.”

The surprise, Morgan honestly admits, is that he was not sacked earlier. “It’s like football: if you play risky, attacking football you will get clobbered occasionally and you might get sacked.” He feared for the worst after being caught buying shares in a company tipped in his own newspaper: “Full credit to the board for standing by me.” Or not.

Yet there were as many scoops as scandals. And after 9/11 Morgan, heroically, took the Mirror “oop market”, eschewing celebrity tittle-tattle. This wrong-footed rivals: seriousness had not been a Morgan trait.

The reformed Morgan won awards and plaudits from everyone bar Mirror readers, who deserted faster than the Republican Guard: “I thought we could change things. The future of the Mirror depended on us finding a third way, for a more serious tabloid, but we ran out of cash. There was a real sense of disappointment when we were forced by sales to change agendas.” Piers, casually dressed in black short sleeves, turns wistful: “It is my one regret.”

So does he accept blame for the failure? “It wasn’t a stunning sales success but I don’t see it as failure.” His problem, he claims, is “we could never compete” against the big boys.

As Allied troops circled Baghdad, the noose tightened round Morgan. “We suffered big sales problems. Britain is a very patriotic country. We never attacked our troops but this was lost on our more patriotic readers. My own brother was serving in Basra but I couldn’t go, ‘Kapow: bang, yippee, we are killing loads of Iraqis’.”

Now he feels vindicated. “My brother was pro-war but I think he would now feel it was a bit of a mess.” And then for his killer claim: “I have been told by very senior policemen that there will be court cases in the new year to hear allegations of horrific abuse, including murder.” Hmm, Piers, we’ll see.

But didn’t he, by running those fake pictures, put lives of Tommies at risk? “There was no backlash in Iraq to the photos because people there knew — their relatives came out of prison black and blue. It was no surprise to me.”

He is on strong ground pointing out Blair’s last remaining justification for war was as a moral crusade; so it was “all the more reprehensible that our war effort was not always conducted in a moral way”.

But for all Morgan’s claims, he never proved abuse. He concedes now his argument that his photos, although possibly fake, illustrated general abuse was “a little clumsy”: “I should never have said that.”

But wasn’t he hoaxed a little too easily? “I still don’t know if it was a hoax — I would love to know — but if you take a big punt there is a strong possibility of fallout.” Critics might say this made Morgan a dashing — but ultimately dangerous — editor. His publish-and-be-damned attitude worked all right with the usual tabloid fodder but on the hard stuff Morgan surely had a higher duty of care.

He insists he is not bitter with Sly Bailey, his Mirror boss who sacked him, though while he lauds earlier chiefs he only says: “I got on pretty well with Sly Bailey.” Still, the payoff tempers any bitterness: “I am not confirming figures but it does mean I have not been forced to accept crap telly work on the Living channel for 20 quid and a couple of Milky Bars.”

Instead, he has written a highly readable diary of an Arsenal fan, Va Va Voom! With typical luck, it has been the most swashbuckling year in the club’s history. The day after his sacking, Morgan, a father of three, took refuge at Highbury, and suddenly realised how exhausting the past decade had been (he was the youngest editor on Fleet Street at the News of the World at the age of 28). “People don’t understand if you haven’t had the pressure of editing a newspaper: there is only one pace and it’s furious. It catches up with you when it finishes; I sleep a lot better now. I don’t have to worry about all the minutiae, the phone was always on, always someone up to no good. . .” Yes, normally you, Piers. “Yes, exactly.”

The loss of the chauffeur and the famous sorts he enjoyed being photographed with must have been a blow. “I was amazed stamps were self-adhesive,” he quips. “As an editor if you have a good PA you don’t have to do any of the mundane things, but I’ve now managed to get broadband and new tyres for the car,” he says proudly.

He clearly misses the buzz and would like another editorship. “When people read my memoirs they will be amazed, and appalled, at the degree of access I had with the Queen or Downing Street. Even I can’t believe it now. The stuff with Diana will stun people.” Not that he was ever quite the tabloid geezer he painted himself: Piers Stefan Pughe-Morgan was brought up in middle-class Sussex and always knew his way round a picnic hamper.

Having been in the eye of the media storm, married Morgan has belatedly developed sympathy for those caught with their strides down. “There is a real blood lust. You can tell how intense the pressure is by the number of photographers. What I learnt from the outside is the public don’t have the same severe moral view of these things as journalists; we are the great moral arbiters, yet we celebrate drumming out a politician by going off fornicating.” Do we, Piers? He lost a test case on privacy with Naomi Campbell. I ask if tabloid intrusion into the personal lives of the famous has turned the judiciary against the press, which could make it easier for Establishment figures to hush up real scandals such as corruption.

“You are right, papers have overdone sex scandals: Sven should lose his job — but only because he can’t inspire the same passion on the pitch as in the bedroom.”

He insists No 10 has “stayed in touch” but he remains estranged from Cherie Blair, who tried to get him sacked as she thought him a “closet Tory”: “Cherie is more of a true socialist and she found it harder than Tony with his easy charm to deal with the media.” With “sources” hinting at revelations in his memoirs about the Blairs, is it any wonder Tony hugs Piers close? The charm offensive is unlikely to work, because the great virtue of Morgan is that he loves causing trouble. “Andrew Marr said my problem was I didn’t have a friend in any political party. I thought that was quite a good way for an editor to be.”