By ROBERT HARDMAN

Last updated at 08:54 12 May 2007

They say yachting is like standing in a cold shower tearing up £50 notes. Now, meet the boys who shred MILLIONS in the barmiest race of them all.

There's no cushion on this seat. In fact, it's not really a seat at all. I'm trying to squat on a patch of carbon fibre and there is water sloshing around my feet. Every few minutes, a violent jolt sends me flying to the floor. There is an appalling groan from a pulley next to my head. Apparently, it can take 18 tons of strain but it sounds as if it is about to give up the struggle. A Nelsonian prisoner probably had a more comfortable berth than my slot on this boat.

So why are some people are prepared to pay millions of pounds just to spend an afternoon where I am sitting? "It's like a drug," says Lara Onorato, the wife of one of Italy's richest men, Vincenzo Onorato. He would be a good deal richer if he had not got involved in all this. "Once you start, you can't stop," says Lara. "Every time it's over, we say 'never again' and then we do it again." Nothing makes much sense when it comes to the America's Cup, the most exclusive and elusive prize in sport.

It is actually a British yachting trophy which currently belongs to a Swiss multi-billionaire who has chosen to defend it in Spain. And 11 fellow plutocrats have been battling it out for the right to take him on. The prize money is zero but the stakes are Olympian. Thousands of jobs and the fortunes of an entire city depend on the ownership of this gnarled old piece of silver.

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To understand all the rules of the America's Cup you would need twin degrees in marine engineering and law. But it's really very simple. You make a fortune, you spend a large part of it on building a 24-metre, 24-ton yacht plus hiring the finest sailors money can buy. The sailors can be from any nation you like. Only the boat needs to be from your own country.

And then you must beat all the other would-be contenders to become the solitary challenger. Only then can you formally take on whichever billionaire happens to hold the trophy at the time. If you succeed, you hire a squadron of lawyers and change the rules to make it as hard as possible for anyone else to pinch it. Anyone can launch a challenge but it is the holder who decides where, when and how.

This may explain why the cup has changed hands only five times in the 156 years since it was first contested. And it has not been contested in European waters for a century and a half - until now.

This saga goes back to 1851 when the Royal Yacht Squadron put up the 100 Guineas Cup for a race around the Isle of Wight. It was won at the first attempt by a U.S. yacht called America whose owners took the trophy home and renamed it the America's Cup.

It took another 132 years before Alan Bond's Australian boat prised it from the grasp of the New York Yacht Club. Since then, it has been snatched back by the Americans, grabbed by the New Zealanders and finally seized by the Swiss, of all people. With no sea of their own, they have moved it to Spain and it continues to drive some of the richest men in the world to distraction.

It is impossible to calculate the combined wealth of the main players here in Valencia. Some of them make the Duke of Westminster look like a benefits claimant.

Among those shovelling cash into the water is Patrizio Bertelli, whose boat is splattered with the name of the family business - Prada. Flying the Swedish flag is 26-year-old super-rich kid Hugo Stenbeck, heir to one of the largest fortunes in Europe (his London-based sister, Cristina, was recently named as one of Britain's richest women).

None of this lot, though, come close to the reclusive American computer titan Larry Ellison, founder of the Oracle software empire. In 2000, he was listed as the richest man in the world, although he is thought to have dropped back to number 15.

It seems a fairly academic question as I look out to sea at what resembles one of the Balearics. Is that Majorca? No. It turns out to be Rising Sun, Mr Ellison's 430-foot motor yacht. No one has seen him on dry land for weeks. When he is not racing, he prefers to sit offshore on his personal liner rather than socialise ashore with fellow billionaires.

"I last saw Larry in New Zealand a few years ago," says Lara Onorato. "Sometimes, you wonder if he really exists." Her husband Vincenzo, 49, charismatic owner of Italy's Moby shipping line, certainly exists. He is one of the most outspoken tycoons on the block.

He calls his team the "Latin Rascals" and lists his hobbies as "chocolate mousse, blondes (especially Kim Basinger) and old Westerns". "I only learned to sail because Vincenzo is so jealous that he would not leave me on the shore while he was out sailing," says mother-of-three Lara, a former television presenter.

Vincenzo is not entirely sure how many yachts he owns. "Maybe a dozen," he suggests. But even he believes that there is now far too much money in this event. "Some of these teams have a budget of at least 100 million euros (£70 million) and it is killing the competition," he says. "It's becoming too bloody expensive. We need to limit costs and get more challengers."

But the present holder of the America's Cup is not sympathetic. Ernesto Bertarelli certainly has a charmed life. Married to Kirsty, a former Miss United Kingdom, he has just sold his biotech business for £7 billion - at the grand old age of 42. With no balance sheets to worry about any more, his main focus now is to hang on to his cup. And he has no plans to make it a poor man's game.

A Swiss national of Italian lineage, he won the cup from the New Zealanders in 2003 and then had to decide where he would like to defend it. Lake Geneva was hardly the place. So he went round Europe to find out which city would make the biggest fuss of his trophy. It must have been like having your own Olympics and asking who would like to stage it.

In the end, Mr Bertarelli chose the Spanish city of Valencia and it has not let him down. The locals have spent £500m on a port fit for the Bertarelli party and another £500m on doing up their roads and airport.

They have built a "superyacht" marina for the Midas crowd to park their floating villas, and prices start at £50,000 a month. Mr Bertarelli keeps his moored next to two familiar yachts - one belongs to his mother, the other to his sister.

A canal half a mile long has been dug so that no one has to queue for an old swing bridge to open. And the Foredeck Club, a panoramic ocean-front hospitality suite, as big as a medium- sized parliament building has gone up.

They have even built a special extra-big quay just for Mr Ellison's boat, which is a shame as he is refusing to park it there. In return for its investment, Valencia has enjoyed an invasion of sailors, designers and boffins who have moved entire families here from all over the world.

Any team wishing to challenge for the America's Cup has to take part in a series of warm-up races, which started here in 2004. All 11 challengers - some of them employ over 100 people - have been running huge operations here for three years. The cost is simply mind-boggling.

Some billionaires, like Ellison or Bertarelli, are competent enough to be part of the racing crew. Others have to sit quietly at the back. The racing rules allow for a crew of 17 plus one person who is not allowed to do anything at all and must stay out of the way at the stern.

This is where the tycoon or corporate sponsor sits on a wet floor to find out where their money has been spent. It is the nautical equivalent of being stuck in the boot of a Formula One car.

I am determined to see what the fuss is all about. And one of the poorest teams - with a budget of just £20 million - kindly agrees to take me on board for the day. It is one of three Italian entries and is called +39 (the international dialling code for Italy). Unlike some of the other teams, this one was financed not by a billionaire but by the odd millionaire and some Italian sponsors. Following various money crises, though, the team has had major problems with kit and supplies.

The result is that they have not won a single race in the final qualifying tournament, the Louis Vuitton Cup, to select the ultimate challenger. None of their sponsors has shown up so there is an empty slot at the back. I am in it.

They may lack money and a decent boat but these sailors are some of the best in the world. A quarter of them are British. The skipper is Ian Percy, one of our Olympic gold medallists from the 2000 Sydney Olympics. His tactician is fellow Brit Ian Walker, a double Olympic silver medallist.

The boat also includes rising British stars Chris Brittle, from Leicester, and Andy Simpson, from Surrey. "It's very sad that we've been let down but we are going to fight every last inch of the way," says Percy, 30.

And they give it their all. We are up against the South Africans, whose boat and resources are far superior. "We are better than them, guys, and you know that," Percy tells his Italian/British/Polish/ Australian/Argentinian/Czech/Croatian crew as we eat our pre-match meal.

Some teams have dieticians and specialist cooks. The +39 team budget only extends to a tuna and tomato sandwich and a banana.

As we warm up, Percy lets me take the wheel for a few seconds. It is utterly exhilarating. The lightest of touches, one way or the other, causes a fierce growl in the £50,000-a-piece sails.

It is impossible to tell what is happening in the turmoil around the start line but Percy times it to perfection and we set off a length or two ahead of the opposition.

For the best part of two hours, we cling on to our lead. Our bowman leaps around at the front like a man possessed. At one point I look up to see that he has been hauled up the mast in a sling to prod some obstinate sail into the correct shape. There is remarkably little shouting. These men know their jobs.

Some, like Chris Brittle, are called grinders - muscle machines who crank huge winches. Others are trimmers, fine-tuning the line of every sail. Each time we change course, everyone leaps to the nearest rope or winch handle and heaves with all their might.

Except me. I just sit at the back in my puddle of water and watch, thrilled to be a footnote in this epic contest.

We finally beat the South Africans by 50 seconds. The team are pleased rather than jubilant. There is a spot of backslapping but no whooping. We are still at the bottom end of the league table. These men know they have no chance of lifting yachting's greatest prize this time. But they have salvaged some pride.

We return to our base, a basic warehouse. Nearby, I drop in at the headquarters of Larry Ellison's team, BMW Oracle. It is like a five star hotel. Escalators take me up to a shiny penthouse with a bar and umbrellas and a huge buffet.

The brainpower is awesome, as are the logistics of this operation. Not only have they built their own wind tunnel but they even have a pre-race meteorologist, who stays on the boat until just before the start when he is thrown overboard to avoid pushing the crew numbers above the 17-man maximum limit.

It is, plainly, barmy. But don't scoff for too long. A serious British bid is being prepared for the next America's Cup challenge. It is led by Sir Keith Mills, one of those who brought the 2012 Olympics to London, and he is seeking a whopping £100 million of sponsorship.

If he wins the cup, this circus will be coming to a port somewhere in Britain. Sadly, though, it is unlikely to be staged in its original home of Cowes. First, there are not nearly enough five-star hotels in the little Solent town (in fact, there aren't any). And second, where on earth would Larry Ellison find enough space to park his private kingdom?