The sun glints on the Thames as I walk across Tower Bridge to City Hall to meet Ken Livingstone. High on top of the building, a dark figure is looking through a telescope – for a moment I think it’s the mayor, so paranoid after his terrible week that he’s watching my every move as I approach his lair.

It is fitting that Red Ken dubbed his offices “the glass testicle”, because whatever his many faults, Ken probably has more political cojones than any other politician of his generation.

As a child I loved Ken Livingstone. His original “fares fair” policy when he was head of the Greater London Council meant I could travel anywhere in London for 10p. For years he led a charmed political life as Teflon Ken, always moving on before any dirt could stick.

He ran rings round Tony Blair to become mayor of London, against new Labour’s wishes – and has stacked up a formidable list of enemies; as Neil Kinnock famously said: “Everyone likes Ken Livingstone except the people who know him.” Another Labour insider told me: “There are three reactions when you mention Ken: fear, hatred or adulation – you are either with Ken or against him.”

The breathtaking view from the mayor’s office takes in the “gherkin” skyscraper, HMS Belfast and the Tower of London; but Livingstone has reason to feel besieged. Last week, after a 13-week war with the Evening Standard, London’s local paper, Lee Jasper, his close friend and political crony of two decades’ standing, was forced to resign.

“It’s been a bit of a week,” he admits, looking scruffy, unshaven and all his 62 years. (He perks up when he tells me that he raised nearly £250,000 for his campaign in four minutes the night before in an auction of a work by Banksy, the graffiti artist.)

The allegations against Jasper, the mayor’s former race adviser, are that he helped to direct at least £2.5m of public funds to 11 ethnic organisations to which he had close links. The Standard’s Andrew Gilligan (the former BBC Today programme reporter who said the government had “sexed up” its Iraq war dossier) has been relentless in pursuit of Jasper.

Despite reports of police investigations into missing funds, the killer blow eluded Gilligan until last week when a series of embarrassing leaked e-mails revealed a rather closer than normal relationship between Jasper and Karen Chouhan, the 50-year-old company secretary of a group that received £65,000 from City Hall. (Jasper wrote that he wanted to “honey glaze” her before a “passionate embrace” and that he loved her “thighs, bum and belly”.)

Surely Livingstone should have sacked Jasper (who has nine children) weeks ago? “No,” he says firmly. “There was not a shred of evidence against Lee till these new e-mails. The e-mails were the first thing that broke our internal codes and if they had been produced at the beginning, he would have gone at the beginning, rather than dragging all this out.”

What about the more serious allegations about the misuse of taxpayers’ money? “There is no evidence that he did anything wrong, or that there is any financial wrongdoing by anyone. I’ve been on the receiving end of complete inventions by the Standard for 25 years. And when it’s Gilligan, given his involvement with David Kelly [the government scientist who was outed as Gilligan’s source and committed suicide], and his failure to take proper notes, which came out of the Hutton inquiry – the idea that I am going to suspend or sack someone because Gilligan writes something in the Standard would be a travesty.”

That is a typical Ken “reverse ferret” – skim over the allegation and kick hard at the morals of the person who made it to try to undermine the attack. But however hard he defends Jasper (and he stood by him long after it was politically sensible), the scandal is doing him damage. Today his regime is a bit like John Major’s government, buffeted by sleazy allegations that just keep on coming.

When he was first elected mayor, he was a rebel, David against the new Labour establishment’s Goliath. Now his regime seems tarnished and Ken, the cheeky chappie, has revealed his nasty side. The voters know it. The most recent YouGov survey put his Tory rival, blond bombshell Boris Johnson, ahead in the polls on 44% (down one point), Ken on 39% (down five points) and Brian Paddick at 12% (up five points, good news for the gay, pro-spliff Liberal Democrat former policeman). So Ken is in choppy waters.

When asked how damaging all this has been to him, he is characteristically bullish: “Well, my poll ratings have fallen from 49% to 44%. That’s remarkable. It’s not exactly 18% is it? Londoners aren’t stupid. They know the Standard is out to get me, it has been for 20 years. People know they’re doing one last heave to get rid of me.”

Aha. Another Ken tactic. Baffling statistics (there have been rows about the figures all week – his office explains the discrepancy by saying that his figures come from private Labour polling that puts him and Boris neck and neck) followed by allegations of a complex conspiracy. The bare bones of which are that Associated Newspapers (the Standard’s owner) wants him out of office before the new contract comes up for its Metro newspaper, which is lucrative and distributed free at Tube stations. “Because they think I might rig the contract so they don’t get it . . . I would go to prison if I did that. But they believe it because they think I am a creature of such pure malignant evil with such a web of influence that I could do that.”

There is always a reason why people are being nasty to Ken and his associates that is never, ever anything to do with what they’ve actually done. For instance, Ken said that the attacks on Jasper were “racist”: does that mean newspapers can’t investigate anyone who is from an ethnic minority who might have mismanaged public funds?

So, Ken, what about when Trevor Phillips (then head of the Commission for Racial Equality) dared to say that multiculturalism was leading to segregation. At that point, the mayor of London announced that Phillips (who is black) had “gone so far over to the other side that he’ll soon be joining the BNP”. Now, wasn’t that “racist”?

Ken, of course, has never apologised. But does he regret saying it? “No.” And to demonstrate that he was right, he adds gleefully: “Can you believe Phillips’s latest piece in Prospect magazine?” (Phillips argues that Barack Obama, the US Democratic senator, would be the wrong kind of black president.) “How can he say that?” shouts Ken. “Having Obama as president would be a breathtaking advance for black people, not just in the US but around the world.”

How does Ken square his great love for racial and sexual equality with appearing alongside and endorsing hardline Muslim clerics such as Yusuf al-Qaradawi (who says homosexuality is a sexual perversion punishable by death and calls on God to destroy the “usurper Jews”). Could it be that by sucking up to such figures, he convinces Muslim bodies that, unlike other political figures, he is on their side – and then gets their votes? Politics, politics, all is politics.

At this Ken is an undoubted master: today, for instance, he attacks Gordon Brown for not showing enough “courage” to take a lead on climate change and for getting it wrong on taxing “nondoms” (foreigners who live in Britain but don’t pay tax on the money they make outside of this country).

Ken thinks that this is a recipe for disaster: “I’d love to tax rich Londoners and give the money to the poor, but a tax on nondoms is undoubtedly dangerous for London. We rely on importing people; 90% of migrants here come with a degree.” What we need to do, he thinks, is to have “joint US/EU legislation to squeeze all tax havens – otherwise these people will just move elsewhere”.

Is Ken – with an eye on the May 1 election – distancing himself from an unpopular prime minister? Watch this space. He is dismissive of the decision last week by Ruth Kelly, the transport minister, to shelve road pricing, saying that she and Gordon are “too nervous”. He adds: “I’m one of the pessimistic ones on global warming – I think tens of millions are going to die as a result of rising sea water. It will be a catastrophe . . . there is a real potential that human civilisa-tion may not survive the century.

“But over the past two years we’ve shown how you can reduce carbon emissions by 60% in 20 years in London, so you could reach the 80%-90% reduction required by 2050. It can be done. It requires the government to take action, switch to locally produced energy – 65% of energy generated is wasted. If you use the wasted heat to warm homes, you can reduce the waste to 15%.

“Within 10 years, all the advanced countries will have to recast their economies – like they did in the second world war to create enough armaments. All efforts will have to be concentrated on carbon-capture technology. But so far Brown and the other political leaders don’t really think it’s that bad and aren’t really thinking in these terms.”

Why not? “They won’t take the necessary action because they are nervous about losing jobs and increasing costs. There is a lack of courage in our government – they lack the courage to lead. They worry that tackling climate change means we’ve got to live a worse life: that we’ll be living in mud huts, making our own clothes and growing muesli. We don’t. We just have to stop the consumer binge where if something breaks down you buy a new one, which is unsustainable, and go back to the values of my parents’ generation: waste not, want not.”

Surprisingly, Ken’s parents were both working-class Tories (his mother Ethel was a dancer in London theatres, his father Robert a seaman in the merchant navy). He was brought up in Lambeth, south London, failed his 11-plus and worked for eight years as a hospital technician before winning a seat on Lambeth borough council.

Despite all his slick footwork, the down-to-earth side of Ken is real: not for him limos and swanky restaurants. He tells me it’s his turn to do the family shopping. “There’s me bags,” he says, pointing to a grotty, reusable blue shopper. He claims to be a nifty cook but cheats with supermarket starters: “I had to learn to cook: my parents thought I was so dysfunctional I’d never be married.”

He and Emma Beal, his wife, have two children of three and five: “knackering” he says. He is about as far from a sleek plutocrat as you can imagine.

Those who loathe Ken are relieved that at least he didn’t become prime minister, a job he would have “loved”. If he were sitting in Downing Street today, what would he do?

“No more motorways, no more airport expansion, no big power stations, divert all money to fund rail. I have no problem with the nanny state – the English ruling class love a bit of being beaten by nanny and it didn’t do them any harm.” In an age where politicians hardly ever say what they mean, it is no wonder he connects with voters.

You can also never predict which way he will jump on things: unlike many on the left, he insists: “I love America. I was inspired by the Kennedys to go into public service.”

How could we add a bit of American magic to our own political process? After all, even people who usually hate politics are riveted by the US elections.

Ken’s face lights up: “We need to have a primary system in this country. The reason our politics is so boring is because we vet all our candidates. As a result, it’s becoming an all-graduate profession: even in this Labour government, there are only two definably working-class players: Hazel Blears and Alan Johnston. The working class can’t get past the vetting process.

“We need to break the grip of the party machine. The primary system allows people to bypass the party structures. We also need a directly elected prime minister who can bring anyone into his government, not just MPs – then you’d get a wider spread of people. Parliament should be smaller.” Kate Hoey, the Labour MP, has accused Ken of running London like “1930s Chicago” – he admitted on the Today programme to running it like a “personal fiefdom”, but blames that on the way the mayor’s powers were drawn up by Blair. He confesses to being a “workaholic” (he often used to sleep on his office sofa when he ran the old GLC) and says that he needs to work all hours because so many of London’s levers are in his hands. (“The reason we can do things quickly is because we don’t have Sir Hum-phrys and civil servants. My so-called cronies work with me because they want to get on with change.”) His grasp on the specifics of his brief, from crime to housing to creating a Paris-style beach to encourage Londoners to holiday in the city this summer, seems firm.

“In this job you’ve really got to be on top of the detail, you’ve got to know how to run things: the next mayor has got to deliver Crossrail on budget, build 50,000 low-cost home in three years and take over dealing with unemployment and skills from the government.”

This is the thrust of his most deadly dart against Johnson. Boris, he jibes, “has never run anything”. (Johnson has been a columnist, newspaper executive and editor of the Spectator magazine.). He also insists several times that Boris is a “climate change denier” – but on what evidence?

“Where’s my Boris file?” he calls to his office. Boris should be worried: Ken has been through all his speeches and columns for ammunition to use against him.

“That’s where you find out what Boris really thinks. Like ‘screw up the Kyoto treaty and use it for putting practice’. It all played very well with retired colonels in the home counties, propping up the bar in golf clubs. It never occurred to Boris that he’d have to run in London.”

Will Ken get back in? Maybe. But he’s been in the job for eight years – and it shows.

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