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This eccentric Indian ruler was the world's richest man. He had 86 mistresses, 100 illegitimate sons and employed 38 staff to dust palace chandeliers.

Yet the last Nizam of Hyderabad, Sir Osman Ali Khan, also knitted his own socks, wore the same patched clothes for months and cadged cigarettes from his guests.

The crumpled turban that he always wore was in stark contrast to the £50million ostrich-egg sized diamond he used as a paperweight.

He was officially called His Exalted Highness, but was nicknamed His Exhausted Highness because of his complicated lovelife.

The last Nizam was the ruler of India's largest princely state - the size of Scotland and England combined - and was the richest man in the world until he died, aged 80 in 1967.

This week, more than 40 years later, India has finally agreed to begin negotiating a settlement between the Nizam's 470 bickering descendants over cash he left in a London bank 60 years ago.

The Muslim ruler had deposited £1million in a high street bank account in 1948 just before his kingdom was taken over by India while he pondered letting his southern state become part of Pakistan.

He kept much of his fortune, but lost most of his power.

It was a drop in the ocean for him - his wealth was then estimated at £100m in gold and silver and £400m in jewels.

But £1m then has swollen to £30m now.

So as the legal wranglings begin, the legacy of the eccentric Nizam lives on in the stories of his extreme decadence... and eccentric tightfisted frugality.

There was the time he wanted a new blanket to keep him warm and ordered a servant to buy him a new one - with strict orders not to spend more than 25 rupees (32p at today's rates).

The aide came back empty-handed because a new blanket cost 35 rupees (45p). So the Nizam made do with his threadbare old blanket.

Then there was the time he donated trunkloads of gold coins to the National Defence Fund of India and said to his workers: "I am donating the coins, not the trunks. See that they are returned."

He disciplined himself to live on the equivalent of £1 a day and smoked the cheapest brand of cigarettes, relighting and smoking the discarded butts - he once took a cigarette from an adviser, cut it in half and offered the man half back.

Yet he surrounded himself in outrageous sumptuousness. It is said he owned enough pearls to pave Piccadilly Circus in London.

In one of his many palaces he had a wardrobe half a mile long, bulging with exquisite silks, brocades, damasks and fine muslins.

Another palace had a mile-long banqueting hall. In the basement of yet another palace was an underground vault full of run-down trucks and lorries. They were stuffed full of gems, pearls and gold coins.

The Nizam, terrified of a revolution or takeover of his state, made plans to transport his wealth out of the country. But then he grew bored with the idea and left the lorries to rot.

In 1955, when he heard that mice had nibbled away £3m of old banknotes stored in trunks in a palace cellar, he shrugged off the loss.

But he also had a sensible side. He was taught English, Urdu and Persian and is credited as being the genius architect of modern-day Hyderabad, which is now one of the biggest cities in India.

His rule saw the expansion of roads, railways and the postal system, established universities, hospitals and factories.

Yet for all his intelligence and good breeding, he was not above committing the odd faux pas.

When the Prince of Wales, later King Edward VIII and, after his abdication, the Duke of Windsor visited him in 1922 he wanted to make sure he felt at home. So he arranged for his chamber pot lid to play the National Anthem when it opened.

He was also particularly vain, so had a car specially built with an elevated rear seat because he felt he should be seated higher than his subjects.

But women were his real weakness. His collection of beautiful concubines lived happily, it is said, in strict purdah, kept in complete isolation from all men - except the Nizam.

Eventually the Nizam's princely title was abolished by the Indian government in 1974.

Then crippling new taxes and land acts forced him to sell much of his property.

His obituary described him as a shambling old man who spent his last days wandering around in old slippers - but his funeral procession was one of the largest in Indian history.

The Nizam's first grandson and technically the heir to his throne, Mukarram Jam, succeeded him - but he soon found himself immersed in financial chaos.

Mukarram emigrated to Australia and spent much of his inheritance setting up a sheep farm, which failed.

In his absence, his grandfather's unsupervised Hyderabad properties were looted and precious artefacts sold in street markets for a few rupees.

What was left of the Nizam's phenomenal wealth has been used to pay off debts and maintain the lavish lifestyles of his many descendants.

And so the family's fabulous fortune crumbled.

The House of Lords said the London money could only be released if all involved parties agreed and so only now after years of legal wrangling does Mukarram look set to inherit a 20 per cent share of the fortune that has grown in the vaults of the London bank.

It means he should soon be able to afford a home far more palatial than his small two-bedroom apartment in Istanbul.

But the Nizam's five surviving wives, one of whom is a former Miss Turkey, are also set to stake their claims on his remaining cash.

India and Pakistan will share the rest of the Nizam's legacy.

He was minted yet miserly, and left a family feuding over his fortune.

Perhaps the seventh Nizam is best summed up by a British politician's wife who visited him at his peak. Her description of him was "mad as a coot".

HIS OFFICIAL TITLE (DEEP BREATH..)

His Exalted Highness Rustam-i-Dauran, Arustu-i-Zaman, Wal Mamaluk, Asaf Jah VII, Muzaffarul- Mulk-Wal-Mumilak, Nizam-ul- Mulk, Nizam ud Daula Nawab Mir Sir Osman Ali Khan Bahadur, Sipah Saula, Fateh Jung, Nizam of Hyderabad and of Berar, Knight Grand Commander of the Most Exalted Order of the Star of India, Knight Grand Cross of the Most Excellent Order of the British Empire, Honorable General in the Army, Faithful Ally of the British Government.

HIS JEWEL COLLECTION

The Nizam's 173-piece jewellery collections, which was guarded by eunuchs during his lifetime, had an estimated worth of £2billion - but it was bought by the Indian government in 1995 for the knockdown price of £33m.

The most famous jewel in it is the sparkling Jacob diamond, the size of an ostrich egg that weighs 184.79 carats and is worth £50m. The Nizam wrapped it in newspaper and used it as a paperweight. His collection, displayed in India last year under heavy armed guards, also included a beautiful seven-stringed pearl necklace, known as "satlada".

HIS PERSONAL STAFF

The last Nizam had a total of 14,718 employees when he died. In his main palace alone, there were about 3,000 Arab bodyguards, 28 people paid to fetch drinking water, 38 to dust chandeliers, several specifically to grind walnuts and others whose job was to prepare addictive betel nuts for him to chew.