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What is Sir Alan Sugar really like? Judging by his appearance on the BBC TV show, "The Apprentice", the answer seems clear: he's a gruff misanthrope with little patience and less tact, who sees business as a necessarily amoral process in which customer needs are satisfied at the highest possible margins.

Yet when he appeared before a 500-strong audience of the London Business Forum, a soft centre was almost visible beneath the hard shell.

The extended question-and-answer session, which took place at Waterloo's iMax theatre, produced all the grumpy responses one could have hoped for. But it also revealed that Sugar lives both his professional and personal lives by a profound set of values, and that he felt a sense of duty towards the next generation of British entrepreneurs.

"Tonight you have the unique opportunity to quiz one of Britain's business heroes," said compère Jeff Grout, who would sit alongside Sugar at centre stage during the event while their images were projected onto the massive screen behind.

He listed a few of Sugar's achievements: founder of Amstrad; chief backer of Tottenham Hotspur Football Club; owner of various businesses in industries such as jet charter and commercial property. But, of course, what we all wanted to hear was some of Sugar's trademark belligerence. And as the attendees began to ask their questions, it didn't take long to emerge.

"How much importance do you place on softer skills in business?" one woman asked.

Sugar's scowl deepened. "What are the softer skills?" he sighed.

"Things like influencing skills, team-working, stakeholder management," she ventured.

"Excuse my ignorance, I'm old fashioned," he said. "I think these are new words made up to keep people busy. Sorry, I've got no answer to that really." He went on to accuse anyone who concerned themselves with such fripperies of creating work where none was necessary. And of having "meetings to organise the next meeting".

It was the younger members of the audience who allowed us to see Sugar's warmer side. At least three of those present were still at school, and Sugar was especially attentive in the way he answered their questions. Indeed, when the first persuaded his teacher to raise her hand on his behalf, Sugar encouraged him to speak up for himself. The boy finally asked: "Do you think the British government should do more to encourage manufacturing businesses in the UK?"

"There's a problem here, in the sense that we are no longer, regretfully, a manufacturing country," Sugar replied. "[This is] simply because places like China have taken over the manufacturing of consumer products, what I call 'hard products'."

He suggested niche manufacturers could survive in the UK, the US and Europe if they were sufficiently specialised. "There are niche organisations in the electronics industry that produce, say, a £500 amplifier that only a very small amount of people will buy, so the volume and quantity is very small, so one [company] can manufacture it," he said. "I think in the food industry there's possibilities in manufacturing, and to a certain extent in the fashion industry."

However, he added, Western governments couldn't really be blamed for failing to encourage their manufacturers to adapt. "I think you can encourage it as much as you want, but you can't force something that is physically not possible, really. I think that the protectionism that existed many years ago in quotas and things like that was a little bit too severe in those times, but perhaps there needed to be a little bit more protectionism over here."

Another young attendee, whose confidence suggested he had entrepreneurial ambitions of his own, asked simply: "What made you so successful?"

"The desire to be self-sufficient and not to have to rely on anybody else, and therefore finding things to do which I could make money out of," Sugar replied. Then, having sensed the boy's enthusiasm, he added a warning:

"I've got to say that you could have that desire but it might not work, because I've possibly been blessed with a talent of some kind.... I'm sure someone could teach me to play the piano, [but] will I ever be a concert pianist? No. Someone could give me some paints and an easel, and after a couple of years I could knock out something that looked like a painting. Will I ever be a great artist? No. And it's the same thing about this entrepreneurial spirit that I was born with. Can I make you have it? Can you buy it in Boots, over the counter in a bottle? Can you buy a book? No. It's there or it's not there. I was lucky enough that it was there with me, because while I had this great desire to be self-sufficient, I still had to be able to spot the opportunities to make things come to fruition."

The question of whether entrepreneurs were born or made was revisited when another, fully grown attendee ask whether Sugar would encourage children to pursue any particular subject or area of industry at school. "That would depend on the aptitudes of that child," Sugar said emphatically. "I think it's very bad policy to start drumming into young children's heads that they're going to be this or that. That decision is one they should make for themselves at an age where they're starting to shine in certain directions."

Nevertheless, he added, children in the UK should be encouraged to learn a foreign language because: "We are a lazy bunch of people here." Recalling his own schooldays spent looking out of the window, he suggested the best way to persuade children to be good students was, in effect, a cost-benefit analysis: "Between 11 and 16, you're legally bound to be in school. You've got no problems. Take what is given to you in the biggest volumes you can, otherwise you will be kicking yourself some time in life," he advised.

The caveat to this point, he argued, is that the examinations regime in UK schools is wholly inadequate. "People who have these academic qualifications are not all they're cracked up to be," he said. "I remember when I was confronted with doing things like A-levels that they were tough examinations to pass. I'm going back to 1963-64. You actually had to write your answers. You weren't given a brain-dead 'pick one of three'... One of the contestants on The Apprentice, who couldn't count, was a Cambridge graduate with a PhD in rocket science or something like that. In my day you'd look at someone with three passes at A-level and you'd know what it meant. Now three passes of grade A at A-levels looks a bit like the Highway Code if you ask me."

Again addressing the young people in the audience, Sugar conceded that qualifications are necessary to get your foot in the door of a large organisation. However, he said, the quality he admires above all in prospective recruits is "an absorbent brain".

Pressed to describe his core values, Sugar said he would have to divide them into two categories: personal and business. "If we're talking about business, I'm afraid my core values are a dying habit, because I'm one of the old-fashioned, loyal players. There's a ruthlessness now where what you've done in the past to assist your customer is completely discounted as that was the past."

Many of the audience looked astonished that the great rottweiler of business TV should discourage ruthlessness in any situation, so Grout asked whether he could honestly say that Amstrad adhered to the principle of loyalty he had just described. Sugar nodded emphatically: "We're diamonds with our suppliers, if I say so myself," he said. "We stick to our existing suppliers and we've had them for 20-30 years. Of course, we're not a charity, and they have to be competitive. And of course if they continually default in whatever way then regretfully we give them up. But we're fair players. And there's no fair-playing any more."

Lamenting the lack of "common decency" in modern business, he continued: "I'm a straight talker: sometimes you don't want to hear what I've got to say. And I think if you talk to anybody with whom I've done business over the years they will, without question, tell you that initially they thought I was a horrible, nasty person. Today, they'll say: 'He is a horrible nasty person but he is very fair and you know where you stand.'... I always say: a handshake is better than any 50-page contract."

As far as Sugar's personal values were concerned, he said they had never changed. "I was born in a council flat and I have a lot of respect for people that don't have as much as I do now," he said. "I still meet with friends that I've had since I was 15 or 16 years old, who are not in the fortunate position I'm in. I've instilled [the same sense of respect] in my children, with the assistance of my wife. It wasn't their fault they got born to a very wealthy individual. There was a danger they could turn into nasty people. And I think we've done a tremendously good job because they're very nice people."

Just when it looked as if Sugar was about to become unrecognisably nice, he was asked to give his opinion on whether big business should support the government in tackling climate change, and the old warhorse trotted back into view: "What's all this green stuff I hear about?" he asked. He insisted that business would always be short-termist and governed by self-interest to some extent. It would only support pro-environmental measures, he argued, when forced to do so by regulation or legislation.

"As far as I'm concerned it's just another obstacle in the way," he said, explaining that his companies had been forced to incorporate various regulations from the EU and elsewhere in recent years. Ultimately, he said, the cost of such things is simply passed on to the customer.

Overall, Sugar left the audience with the impression that one of his principal abilities - perhaps his most important as an entrepreneur - was that of separating the warmth of his personal life from the clinical single-mindedness of his business life.

"If you had your life again, is there anything you'd do differently?" someone asked, as if to test his pragmatism.

"The answer is no, I don't think so," he said. "You have to make errors in order to progress.