Sir Peter Maxwell Davies was pushed to the brink of bankruptcy and plunged into despair by a trusted business manager who squandered his fortune, he has said.

Sir Peter, Master of the Queen’s Music, who in recent years should have enjoyed royalties of about £350,000 a year, realised his plight when he was refused £40 from a bank machine in Kirkwall, Orkney, because he had “insufficient funds”. In the days that followed, he had to rely on handouts from friends, and came within days of losing his home.

“I now realise I should have been a millionaire but I thought all my work was not worth much and that I was worthless as a person as a result,” said Sir Peter, who admitted he felt very “very foolish”.

Michael Arnold, 76, the trusted friend and father-figure who ran Sir Peter’s affairs for more than 30 years, was jailed last week for 18 months for false accounting, involving £522,333 of the composer’s money. Much appears to have been frittered away through on-line gambling.

The accountant and his wife, Judy, 73, Sir Peter’s former manager, had been cleared of the theft of £447,000 after the charge was dropped. The composer said that he felt “utterly betrayed and humiliated” by a man he regarded as “more than a friend”. His music is still catalogued in what he calls “J Numbers”, named after Mrs Arnold, and the composer dedicated pieces of music to the couple. “[Arnold] was like a father to me. I trusted him completely,” he said. “How he could do this to me is beneath contempt. That man tortured me.”

After discovering that he had been cheated, Sir Peter, known as Max, said that he had received a message of support from the Queen and had been helped by friends on the island of Sanday, where he lives with his partner, Colin Parkinson. “It was hard to cope with because I had no money,” he said. “The islanders were fantastic. I would daily find gifts of kindness — a home-baked loaf, fish, a brace of ducks, meals and even a few bottles of wine left in my porch.”

The composer said that he has never had an interest in money and had been naive to hand over his financial affairs to friends like the Arnolds. In return for the vast sums that passed through the accountant’s hands, Arnold allowed Sir Peter only a modest allowance.

“I thought I was on less than the average wage,” said Sir Peter, 75. “I thought labourers earned more than me. I know one year I spent £9,000 and Michael berated me and said I couldn’t afford to spend so much.”

Arnold kept the £15,000 Sir Peter received as the Queen’s composer. He collected £220,000 from the sale of Sir Peter’s Edinburgh flat and even seized £18,000 bequeathed to Sir Peter by a cousin. “Michael grabbed [it] and said I couldn’t have it. It was needed for expenses: taxes, that he didn’t pay, and publicity, that he didn’t do. That’s how low he stooped and how low I felt,” said Sir Peter. In return for the business services he supposedly supplied, Arnold demanded his client fulfilled a punishing work schedule. On one occasion, he committed the composer to a one-night concert in Mexico, requiring a long and complex itinerary from Orkney, which left Sir Peter exhausted.

Sir Peter received a substantial settlement from the Arnolds last year following a civil action in the High Court.

The composer said: “I can go to a restaurant and not worry about the bill now — it is all a new experience to me and it is wonderful.”

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