Niki Lauda’s red baseball cap has become part of the man. It is one of the best known sights in the Formula One paddock, a beacon for straight-talking and it is difficult to imagine him without it. But now he lifts it – just a few inches – and blows out his cheeks as he recalls the unforgettable climax to the 1976 season when James Hunt won his solitary F1 title in Japan, 40 years ago this month.

It is Lauda’s misfortune to be defined not by the three Formula One world championships he won but by the extraordinary events of that season, when he received the last rites from a priest after being engulfed by flames at Nürburgring (that cap hides many of the scars) and then saw Hunt take the crown the Austrian had thought would be his in the shadow of Mount Fuji.

Not that Fuji created many shadows on 24 October 1976. Mario Andretti, who won that day, said: “They were the worst conditions I’d ever seen at the start of a motor race.” Lauda agrees. “The circuit was flooded, and the organisers said we couldn’t have the race in those conditions. We were sitting and waiting for the weather to improve when the clerk of the course came in the room and said we had to start the race in half an hour because of worldwide television rights, and Bernie Ecclestone was giving him pressure.

“I was spokesman for the drivers then, and I stood up and said: ‘Are you guys fucking crazy? The rain has not stopped. It’s got worse. You cannot do this.’ But the guy insisted. For me it was ridiculous. Because of a stupid TV deal we had to go out there and risk our lives. No one could see anything. It was a disaster.

“So then I decided for myself that television was not a good enough reason for me to race. So I told Ferrari beforehand I would do one lap, which I did, and then I stopped. I have no regrets. I would do the same again. But I have to say that without my accident, maybe, I would have had the reserves to do it.”

Hunt went on to take third place and win the world championship by a point. Lauda did not hang around to watch the race. “I went to the airport. I told this Japanese taxi driver to listen to the radio and tell me who had won the title. And exactly when the end of the race came on the radio he drove through the tunnel of the airport and the radio stopped. And when we came out, it was over. Who won? I asked. ‘I don’t know,’ he said. But then, as we came up the ramp to the airport, there was a Ferrari man who wanted to say goodbye. And I looked at his face and I knew straight away. ‘Fuck,’ I thought. And he said, yes, Hunt was world champion. So I went home.”

The story of the battle between Hunt and Lauda that year – the yin and yang of Formula One, the handsome, womanising, extrovert Hunt (he had “Sex: Breakfast of Champions” emblazoned on a patch on his race suit), and the diligent paddock swot Lauda, who was nicknamed “The Rat” because of his prominent front teeth – was made into a memorable film, Rush, by Ron Howard in 2013.

Timeline Niki Lauda's career Show Andreas Nikolaus Lauda is born in Vienna, Austria Makes his Formula One debut for March-Ford in his home Austrian Grand Prix Now driving for Ferrari, Lauda wins a Formula One race for the first time at the Spanish Grand Prix Lauda secures his first world title for Ferrari at the Italian Grand Prix, with one race in the season left to go Lauda is burned in a crash on the second lap of the German Grand Prix at the Nürburgring. His injuries are so severe that he is read the last rites, but remarkably, after reconstructive surgery on his face, he returns to racing the same season, only missing two races Lauda takes his second world championship, securing victory with a fourth place finish in the US Grand Prix, with two races to go Founds his first airline - Lauda Air Having left Ferrari for Brabham, Lauda retires from Formula One at the end of the season Lauda returns to the sport, this time driving for McLaren Lauda finishes second behind Alain Prost in the final race of the season, but it is enough to give him a narrow half-point victory overall, and he secures his third world title Wins his 25th Formula One race at the Netherlands Grand Prix Retires from Formula One after competing in the Australia Grand Prix, with an overall record of 3 world championships, 25 wins and 54 podium finishes Returns to Formula One in a consultancy role for Ferrari Takes on the role of team principal of the Jaguar Formula One team Lauda makes another airline venture, low-cost operator Niki. Lauda is sometimes in the cockpit himself Becomes non-executive chairman of the Mercedes team, where he helped bring Lewis Hamilton to the team Lauda dies peacefully, eight months after receiving a lung transplant

The great rivalry is featured again in an insightful book on James Hunt by Maurice Hamilton. In it, Hunt describes the warmup to the race in Fuji. “It was ridiculous. Approaching the first corner, there was a huge puddle and you had to brake for the braking area. But the main concern was the spray. This, combined with the mist, meant you couldn’t see a thing. It was madness.”

At the end of the Japan race, Hunt added: “I feel really sorry for Niki. I feel sorry for everybody that the race had to be run in such ridiculous circumstances because the conditions were dangerous and I fully appreciate Niki’s decision. After an accident like he had, what else could he do? Quite honestly, I wanted to win the championship and I felt I deserved it. But I also felt Niki deserved to win the championship – and I just wish we could have shared it.”

James Hunt drives through the rain in front of Mount Fuji. Photograph: Grand Prix Photo/Getty Images

Looking back, Lauda says: “I remember James saying that. And it was the nicest comment I have ever heard. We had a respectful, nice relationship, going back to our days in Formula Three. We trusted each other. He would not push you off the road, which in those days was important. So that film, Rush, is good. It’s 80% correct, with a bit of Hollywood.

“Two things happened in 1976, before we got to Japan. First my accident and then McLaren did a big step forward with the development of the car after the summer. The Ferrari slowed down. James’s car was suddenly quicker and he performed outstandingly. He was really quick. No question. At the time, the best.”

Lauda’s decision to return to Formula One only six weeks after the crash that almost took his life, and then finish fourth in the Italian Grand Prix at Monza, is considered to be one of the bravest in the sport’s history. “On the Friday I could not drive. I got out of the car because I was frightened,” he says in the book. “I went to the hotel and thought about it, took it easy on Saturday and then finally got going again.”

Hamilton’s book describes Hunt as a complex character who at the start of his life used to cry at night and have tantrums by day, and at the end of it, in 1993, succumbed to a heart attack at 45. Hunt, when he wasn’t being charming, was often capable of causing considerable offence, such as the time he had a call of nature on a flight and urinated on a curtain separating the aircraft’s cabins.

Lauda, now 67, was champion in 1975, 1977 and 1984. He works as a TV commentator and is also non-executive chairman of the Mercedes formula one team. So if he drove again, what era would he choose? “Today,” he says. “Because they get 10 times the money and there’s no risk. Honestly, safer. At the same time it gets boring at some stage. So we want some of the lost excitement to come back.” Hunt certainly provided that.

• James Hunt by Maurice Hamilton is published by McLaren and Blink Publishing on 20 October