Sky News has learnt that Mr Hands' Terra Firma Capital Partners is among the handful of bidders competing to buy Butlin's from Bourne Leisure.

Terra Firma, which has been largely recast as the Hands family's private investment vehicle, is said to have tabled an offer for the three holiday resorts, although it was unclear on Monday how serious his interest is.

Mr Hands' involvement in the auction pitches him against a quartet of private equity and real estate investors, even as the cost-of-living crisis threatens to impact the valuations of companies exposed to UK consumer spending.

Sources said Terra Firma was bidding against Queensgate, Bain Capital, Epiris and TDR Capital for Butlin's, whose brand was created by its eponymous founder, Billy Butlin, in 1936.

Bourne Leisure, which also trades under the Haven and Warner Leisure Hotels brands, decided along with owner Blackstone to put Butlin's up for sale last year after concluding that it did not fit with the rest of the group.

According to the brand's official history, Mr Butlin "felt sorry for families staying in drab guest-houses with nothing much to do" during a trip to Barry Island.

In its heyday, Butlin's operated from nine sites across the UK, entertaining 1m holidaymakers each year with knobbly knees competitions and glamorous granny contests.

The brand became such an entrenched part of Britain's popular consciousness that it provided the inspiration for Hi-de-Hi!, the long-running BBC sitcom.

Its fortunes waned with the explosive growth of opportunities for Britons to holiday abroad, but has enjoyed a resurgence as the pandemic has fuelled a boom in staycations.

Butlin's other sites today are at Minehead in Somerset and Bognor Regis, the traditional seaside town close to the South Downs National Park.

Mr Hands' interest in buying Butlin's follows a busy period of deal activity involving the firm he founded.

The financier had been hatching plans to offload Annington Homes, the Ministry of Defence-occupied housing portfolio, but has been plunged into a legal row with the government about its future.

He now no longer invests from a general fund but raises capital on a deal-by-deal basis to buy companies.

Last year, Mr Hands bought Kier Living, which he has rebranded as Tilia, and has since acquired Hopkins Homes, East Anglia's biggest private housebuilder.

His efforts to raise a new buyout fund faltered in the wake of the EMI debacle, where he unsuccessfully tried to sue Citi, the bank advising on the deal, Mr Hands has returned to the acquisition trail.

Despite his enormous wealth, he told The Daily Telegraph in a recent interview that he had found happiness an elusive commodity and said he had in part been driven by a need "to be accepted".

Rothschild, the investment bank, is running the sale of Butlin's.

Terra Firma and Blackstone, Bourne Leisure's controlling shareholder, declined to comment.