Madonna may have rediscovered her appetite for the Big Apple, but the American media mogul who runs her former record company has decided that life may be a little better on this side of the Atlantic.

Undeterred by the rise in the higher rate of income tax to 50 per cent, Edgar Bronfman, the billionaire heir to the Seagram fortune and the chief executive of Warner Music, is leaving his native New York for a house in Kensington, West London, with his wife, Clarissa, and four young children from his second marriage.

He plans to run Warner Music — the world’s third-largest music company, home to Green Day and R.E.M — from both London and New York, in a move that is a coup for the British capital, which had been losing ground to its American rival as the City struggles amid the credit crunch.

Mr Bronfman said that his principal reason for moving was to give his children some experience of life outside the United States and he plans to stay in the UK “for a period of one or two school years”. His presence will help to boost Warner’s faltering British operations, which have performed worse than its American business.

Mr Bronfman part-funded a private equity buyout of Warner Music in 2004, worked for David, now Lord, Puttnam, in the early Seventies, and co-produced The Blockhouse, a 1973 Peter Sellers film in which six men are trapped in a wartime German bunker. He also spent two years in the British capital running Seagram Europe in the Eighties — a drinks business that he turned into a short-lived entertainment conglomerate spanning Universal Music and Universal Pictures, which was sold in a disastrous cash-and-shares deal to Vivendi, of France. Vivendi nearly collapsed as a result of the debts it had taken on and the Bronfman family saw the value of their fortune slashed as Vivendi’s share price tumbled.

He told The Times: “Having lived in London for several years myself — both in my youth and later in my business career — I appreciate the benefits that an internationally diverse experience provides children.” With Warner Music’s international headquarters in London, moving to the UK was the only viable option.

Mr Bronfman’s arrival comes at a time when Britain’s importance in the global music industry is at its highest point since the Sixties. Lucian Grainge, the Londoner who runs Universal Music outside the US, is tipped to take over the global top job at Universal when Doug Morris, its New York-based chief executive, retires. Mr Grainge declined to comment on his prospects at Universal Music, but said that Mr Bronfman’s arrival was an endorsement of British creativity: “If you look at our business, we are having more success in the US by value, with artists such as Amy Winehouse, Duffy and Keane, than we have had for at least 20 years.”

Warner insiders were eager to play down the idea that Mr Bronfman’s move would herald another attempt to merge with EMI, whose global headquarters will be barely a mile from his new home. The companies have been in on-off merger talks for most of the past decade, although the discussions, at least for now, are not active.

Mr Bronfman’s arrival also comes at a time when Guy Hands, the owner of Terra Firma, the venture capital firm that owns EMI, the British music company, is moving to Guernsey in protest at the Government’s new 50 per cent income tax on higher earners. Mr Bronfman will also be well placed to build relations in London, where EMI has traditionally been able to repel Warner Music partly by wrapping itself in the Union Jack.

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