To understand a man as enigmatic as Muammar Gaddafi, the Libyan leader whose profiles are often woven out of guesswork and contradiction, perhaps the best place to start is a work of fiction — particularly since Escape to Hell, a 1998 collection of short stories and essays, was penned by the man himself.

For anyone who would like to know why he insists on bringing his tent with him on foreign visits, what his views are on football – “22 people running around meaninglessly after a watermelon-sized sack” – and who wants a taste of the deadpan sarcasm he reserves for Islamic fundamentalists, it is all to be found in this slim volume.

Jumping offthe page is Gaddafi’s admiration for technology but his loathing of cities – of the anonymity of urban life and the asphalt streets that snuff out the fertility of the soil beneath. Towns, he writes, “spread out and devour arable land and surrounding villages, enveloping them under their dirty, stifling wings”.

Hence the sight of the Colonel showing up with his tent in Paris and Rome for state visits, before pitching it in Donald Trump’s back yard this September for the UN meeting in New York, where he celebrated his return to diplomatic circles by promptly tearing up the UN charter.

What Gaddafidoes not explain in his book is how he can claim to be the driving force for African unity – for his rambling 90- minute UN speech he wore a large Africa brooch – while he runs a police state at home which happily throws in jail the refugees fleeing north to Libya from the continent’s many civil wars.

Also skipped over is the Colonel’s eye for a smart investment. Buoyed by oil money, Libya’s foreign investment fund today contains around €44bn with investments made across North Africa and the Middle East, from Morocco to Pakistan, but also in Malta, with a 50% stake held since 1974 in the island state’s largest company, international hotel group Corinthia.

But Gadaffi’s beachhead in Europe remains Italy, dating back to his purchase of a 10% stake in Fiat in 1976 after the late Fiat chairman Gianni Agnelli personally flew to Tripoli and proposed the deal. However, Agnelli came to regret his ties to Libya after the US bombing of Tripoli in 1986, forcing Gadaffi to relinquish his stake that year so Fiat could pursue US government contracts. Even then, the move proved to Libya’s advantage, as it sold up for a sevenfold profit.

Apart from that hiccup, the flow of Libyan money into Italy has not stopped. Today the Libyan Investment Authority holds a 7.5% stake in Juventus Football Club and spent €2.2bn building a 4.9% stake of Italy’s largest bank, UniCredit Group. Officials have said they would like to build their small investment in energy firm ENI to 10% and rumours suggest feelers are out about buying into state controlled defence giant Finmeccanica.

And the love affair with all things Italian doesn’t stop there: two decades after pulling out of Fiat, he is even trying to design his own Italian-style car. Working with a Turin design firm, he has personally come up with The Rocket, a deluxe sports car with an Alfa Romeo engine and enhanced safety features that was described as “proof that the Libyan revolution is built on the happiness of man” when it went on display.

“Italy remains a key diplomatic bridge into Europe for Gaddafiand so it makes sense for him to invest here too,” says Carlo Marroni, who covers the Colonel for Italian business daily Il Sole 24 Ore. “Don’t forget it was Italian prime minister Silvio Berlusconi who brought Gaddafito the G8 in Italy this summer.”

Using business to promote politics and vice versa is of course the strong suit of media magnate Berlusconi and it came as no surprise to learn the two men are business partners, through subsidiaries, in the French firm Quinta Communications. Gaddafiis also mixing business with diplomacy in Africa, matching his bullish promotion of African unity with investments made through the Libyan Arab African Investment Company.

His interest in spending abroad is matched by the attention he pays to entrepreneurs seeking a toehold in Libya. Italian CEOs were impressed when Gaddafimade time during his first trip to Rome in June to address the Italian employers’ organisation Confindustria. “He seems a peculiar character, but his answers to questions about exporting to Libya were precise and when he wasn’t sure he had assistants look into it,” said one.

All this seems light years since Ronald Reagan described him as “mad dog” and ordered the 1986 US air strike on Libya in retaliation for Gaddafi’s alleged bombing of a Berlin disco packed with US servicemen.

After toppling Libya’s King Idris in a bloodless military coup in 1969, at the tender age of just 27, Gaddafi’s early investments were more likely to be in terrorist training camps than five-star hotels.

Then in 2003 came the U-turn, as Gaddafi renounced terrorism as well as his nuclear programme and admitted responsibility for the 1988 downing of a Pan-Am flight over Lockerbie, Scotland, which killed 270.

Governments dropped sanctions and got in line to win contracts to exploit underdeveloped oil and gas resources and sell the Colonel new weaponry after he had just renounced his own, leading to the handshake with President Obama this summer at the G8 conference in the Italian town of L’Aquila.

Then, in August, it appeared the 1980s were back in fashion, as Libya gave a hero’s welcome to convicted Lockerbie bomber Abdelbaset al-Megrahi after his release from custody in Scotland on health grounds. Joining the backlash, Obama called the release of Al-Megrahi “a mistake”.

Back to the doghouse for Libya? Far from it, given the €34bn annual oil revenue Gaddafi has for upgrading the country’s crumbling infrastructure and the contracts he is still dangling in front of Western companies.

“Gaddafiknows exactly what he is doing and assesses the likely reactions that will follow,” says one Italian company boss who does business in the country. He recalls that when Italy was close to offering Libya compensation for its colonial rule of the country in the 1930s, fleets of illegal migrants were leaving Libyan shores and arriving in Italy. “The Libyans said they could not stop it, but I saw those boats in Libya,” says the CEO. “They were in plain sight and clearly used to pressure Italy into finalising the compensation.”

Behind many of Gaddafi’s stunts lurk signs of the same, peculiar wit he displays in Escape to Hell. Why else should he demand that all Italians take DNA tests to find out who is descended from Libyan colonial prisoners? Or show up in Rome with his female, all-virgin troop of bodyguards to greet Berlusconi, just as the Italian prime minister faced accusations of chasing young girls?

But if foreign governments and oil companies are prepared to overlook Gaddafi’s quirky reversals and fits of pique, on the home front the joke may ultimately prove to be on him.

While his Lockerbie howler played out in the headlines, little coverage was given to the storm brewing in Libya as Gaddaficontinues to give conflicting signals about his successor. His second eldest son, Saif al-Islam, long considered Gaddafi’s anointed successor, has been stripped of his newspapers, TV and radio stations, possibly after he denounced security officials for their brutality. That did not stop him meeting Condoleezza Rice in November 2008. His newly emerging challenger, brother Moatassim Billah, who is closer to the security forces and the commander of his own army unit, then turned out to meet new US secretary of state Hillary Clinton in April.

Italian newspaper La Repubblica has said the stand off could now affect the money the Gaddafifamily are spending overseas. “Uncertainty reigns,” it wrote in September, “and until things are resolved, Libya’s investments abroad risk being paralysed, apart from the odd property in London or Paris.”