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At first glance, it's hard to see why Richard Wheatly, who so successfully grew and then sold Jazz FM, would want to return to the fray.

Hopefully, the ageing-boxer syndrome of "just one more fight" before hanging up the gloves hasn't afflicted him. After all, isn't the radio industry now dominated by the big groups, such as Capital and Chrysalis, squeezing ad revenues out of their rivals and looking toward even greater consolidation?

Within this context, Wheatly's decision to lead a bid for a group of local radio stations called Radio Investments, previously owned by Guardian Media Group and GWR, would seem to be a strange one.

And, in any case, you could have forgiven Wheatly, now 57, for slowing down after orchestrating the deal to sell Jazz FM to Guardian Media Group two years ago. But the drive is clearly still there.

It seemed, briefly, that a return to the advertising business was on the cards when Wheatly was linked to a takeover of Cordiant backed by the shareholder Active Value. But this came to nothing when WPP used its muscle to complete the long-expected capture of the disintegrating company.

So he's back in the radio business. He and his old Jazz team, the finance director, Alistair Mackenzie, and the enterprise director, Simon Cooke, hope to grow Radio Investments as a local network and sell products such as CDs on the back of successful local brands.

Wheatly's belief that local radio has a great future is central to his return: "I had enormous fun at Jazz and was able to do exciting things. I learnt that the relationship listeners have with radio stations is not like they have with a newspaper or television. They have a fierce loyalty and this is very interesting to work with but also powerful, commercially."

He wants to use this loyalty to create successful spin-offs from the 22 Radio Investment stations. The plan with The Local Radio Company, which is buying Radio Investments, is to launch it on AIM on 21 May and then use the £50 million raised to acquire the company and grow it.

Wheatly and his senior management team have a 5 per cent stake in the venture. His vision is to help drive the creation of a "second tier" of commercial radio networks that have a different way of operating and are free to grow unhindered by the competition authorities.

"The Virgins, Classics and Hearts are very strong brands but we said: 'There's a different way of doing things.' When you look at some of these stations locally, they have a fairly low share but if you take Spire FM in Salisbury it reaches 53 per cent of listeners. With a network of true local radio, you have a way of building something very different with listeners and advertisers."

Wheatly argues that he and his investors were able to do a good deal for Radio Investments because GWR and GMG were so keen to get out to focus on other interests and because potential rival bidders faced competition issues.

"Bright", "easy going" and "pleasant" are words used by former colleagues to describe Wheatly. During his time at Leo Burnett, he had a reputation for being a great client man, especially close to Nestle. This was problematic given his extreme fear of flying.

According to Brian Jacobs, the media director at Leo Burnett during Wheatly's time as its chairman, he would drive to Nestle's headquarters in Switzerland, such was this fear. "He was extremely good with senior clients and operationally.

I was not the slightest bit surprised at the success he had at Jazz," Jacobs, now the executive vice-president of the global media unit at Millward Brown, says.

Giles Keeble, the creative director at Burnett during Wheatly's time there, says: "When he was the chairman, I don't think the entrepreneurial Richard was encouraged to come to the fore. To an extent, he was looking for a role."

Keeble believes Wheatly's partner, Denise Kingsmill (the former deputy chairman of the Competition Commission and the head of an influential Department of Trade and Industry taskforce), had an effect on the direction he took: "His relationship with Denise has made a big difference to his profile. She's a class act; glamorous, tough and bright and they make a formidable team. His profile has increased and this may have changed his view of what he was capable of doing."

Wheatly believes he's on to a winner with The Local Radio Company, arguing that advertising revenues are healthy (up 15 per cent over the past five months) and that he can replicate the success of spin-off brands, such as the record label Hed Kandi, at his new company: "Jazz was a strong brand but sales of jazz music account for just 2 per cent of record sales.

We've now got a very broad scope musically and will be finding themes that are dominant in programmes. Hits of the past 25 to 30 years is broadly what we'll look at."

He sounds more like a sprightly young contender than a washed-up has-been, rolling on the ropes.

THE WHEATLY FILE

1979: Leo Burnett, chairman and chief executive

1994: Rainbow, chief executive

1995: Jazz FM, chief executive

2004: The Local Radio Company, chief executive