He has been among the craftiest and most aggressive of wheelers and dealers, irking rivals and attracting the attention of regulators as he built stakes to gain leverage on competitors.

Yesterday, however, Mike Ashley signalled an abrupt U-turn in strategy by declaring the Machiavellian tactic of building stakes in rivals through his Sports Direct chain to be more trouble than it is worth. “Sports Direct, going forward, will do less strategic stakes,” Mr Ashley told The Times.

Sports Direct's stake in JJB Sports is under investigation by the Office of Fair Trading, the competition regulator. It is examining whether the company's holding will hurt consumers in the sportswear sector, which has a complex web of cross-shareholdings.

As well as holding the equivalent of 22 per cent of JJB, Mr Ashley's Sports Direct has shares in Amer, Blacks Leisure and JD Sports Fashion.

Mr Ashley, who owns Newcastle United Football Club as well as a 71 per cent stake in Sports Direct, said: “When we take a strategic stake, it doesn't take away our focus. But if you then get press speculation, investors calling and everything else, you do wonder if that strategic stake - even if it proved successful - was [successful] in comparison to all of the noise around it. How do you factor that in, when you're a public company?”

The frank admission is the latest twist in Mr Ashley's torturous relationship with the City. After floating Sports Direct last year, he branded investors “crybabies” and referred to one respected City analyst as “a moron”.

Mr Ashley said: “As a public company, we seem to get lots more focus than we did when we were a private company. Therefore, that has to be taken into account more and more ... We draw the most tremendous amount of focus and it seems a little of an imbalance [between underlying trading and stakebuilding].”

He added: “That's why we talk about becoming more conventional.”

Dave Forsey, Sports Direct's chief executive, said the company was “helping the OFT with its inquiries”, but would not be drawn on any details.

Mr Ashley questioned what leverage Sports Direct would gain from its 4.9 per cent equity stake in JJB, and said that it was smaller than the 10 per cent stake in JJB acquired last month by JD Sports fashion. JD is in turn 57 per cent owned by Pentland, a big supplier to JJB and Sports Direct. Sports Direct also has a 12 per cent stake in JD Sports.

As well as its 4.9 per cent equity stake in JJB, Sports Direct has a 16 per cent interest in JJB through contracts for difference - derivatives behaving like shares but without voting rights.

Referring to the influence of JD and Pentland over JJB, Mr Ashley said: “We're a long way behind them.”

Mr Ashley hopes that by avoiding blocking stakes and strategic moves, such as the holding he built in Umbro before its acquisition by Nike, Sports Direct will be able to focus on its trading performance.

The group surprised the City yesterday with a strong performance in the six months to October 26. Underlying pre-tax profits were up by 3 per cent to £51.8 million. Revenue rose by 2.9 per cent to £687.7 million.

Despite Mr Ashley's intention to become more “conventional” in his relations with the City, Sports Direct still does not report like-for-like sales figures. However, analysts said that a modest decline in British retail revenue implied flat like-for-likes.

Mr Forsey said that Sports Direct's long-term target is to increase its number of stores in Britain from 366 to 600. “Where there's a Next, a Peacocks, a New Look, there should be one of us,” he said.

The company's cash position worsened during the period, with net debt rising to £478.3 million, from £465.2 million. However, the group hinted yesterday that it would devote cash to increasing its market share, rather than reducing its debt pile.

Mr Ashley said: “Market share is a thing people don't talk about in the current environment ... you can pay off debt [with cash], buy freeholds, invest, buy more brands. Or you can go after market share. We have got quite a lot of options.”

Sports Direct believes that its “back to basics” policy will stand it in good stead for the downturn, even if it means taking a hit on margins. Mr Ashley said: “You must pass on all the cost reductions to customers. For a retailer, that's a fact. We're not Harrods.”

Shares in Sports Direct rose by 2p, or 8 per cent, to 38p.

Keeping his eye on the ball

Mike Ashley is arguably better known as the now-reluctant owner of Newcastle United than as a sportswear dealmaker, but his role in both spheres is that of a man who enjoys being kingmaker.

One of his most successful turns was the stake he built in Umbro before its acquisition by Nike, the world's biggest sportswear brand. That netted Sports Direct £15 million and gave Mr Ashley a say in the future of the England shirtmaker, which is a key supplier. Last June he made £29 million on a 1 per cent stake in adidas, only eight weeks after he bought it for £48 million.

Other moves have proved less smart — so far, at least. Sports Direct said yesterday that the value of its strategic shareholdings, including the 22 per cent-equivalent JJB stake, had more than halved in the six months to October 26, from £65.7 million to £30.5 million. JJB also holds stakes in Blacks Leisure, JDSports Fashion and Amer Sports Groups, as well as owning the Slazenger and Dunlop sports brands.

It was the purchase of the 4.9percent direct stake in JJB, led by Chris Ronnie, that sparked the interest of the Office of Fair Trading. The regulator is examining whether a tie-up between Britain's largest and second-largest sports retailers would harm the consumer.

The logic remains unclear. Was Mr Ashley throwing his friend and rival a lifeline to avoid JJB being snapped up by a stronger rival, such as JD Sports, which already has a 10percent stake in JJB? Or was he, again, merely booking himself a place at the top table for the big discussions?

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