Magnus Macdonald has spent a lifetime dreaming up fantastic projects and somehow making them work. The Glass Boat, a floating restaurant he built from scrap on a converted barge, has been a Bristol landmark for the past 25 years. He marshalled a motley crew of travelling traders into an efficient system for feeding tens of thousands at the Glastonbury festival. He thinks nothing of spit-roasting three sheep at once, even a stray heifer and a couple of deer – but when Macdonald set about creating his own “modernist cottage”, cut out of a hill above Bath, he almost came unstuck.

Situated in the desirable Lansdown area of Bath, it is one of six buildings on the site of the former Lawrence estate, now known as Brockham End. Up past the city racetrack and reached via a private road through a golf course, the estate was created in 1915 by Sir Alexander Lawrence, but in 2002 its imposing stone house and surrounding cottages and outhouses were put on the market by his grandson, Sir Henry.

Macdonald, an old friend, got together a group of five to buy the estate and divide it between them. The negotiations were complex – and, while the others got the main house and the cottages, Macdonald, now 57, ended up with a stone generator shed and a wooden shack with a breeze-block extension – and also perhaps the best view in southern England, over gentle hills and woodland to the Brecon Beacons, almost 50 miles away.

At the time, Macdonald, who comes from a family of doctors and grew up in a large house in Gloucestershire, was running a thriving restuarant business in Bristol after several decades as an occasional builder. He and his wife, Jo, 58, whom he had married three years earlier, were ready for a new challenge, and this ramshackle but ideally placed property provided the ideal development opportunity.

With the help of an architect friend (the late Mike Macrae, the man behind the master plan for Milton Keynes), they came up with ambitious plans to tear down the sheds and create an environmentally friendly open-plan home with a ground-source heat pump and underfloor heating.

The Power House was to be built into the hillside – a complex procedure, and one that is susceptible to landslips – and covered with a green roof. “We took the original footprint of the buildings, including the paths around them, and squared it up,” Macdonald says. “In our planning application, we pointed out that, because we were building back into the hill and would have a grass roof, it would have less environmental impact than the original buildings, which looked a bit of a shanty town. We assumed we’d get planning permission because it had been lived in and the original building was substandard.”

It proved an optimistic assumption. Though local councillors unanimously approved the scheme, planning officers took the rare step of referring the matter back to Whitehall. “They were initially helpful, saying ‘Yes, yes, yes’, but when it came to the committee hearing, they objected to everything,” he says. “One objection was the amount of traffic we might create, which was ridiculous, and another was to do with building in a green belt.”

This was all the more galling because Macdonald had gone out of his way to make the building, which has 2,603 sq ft of living space, as unobtrusive and environmentally friendly as possible. “We ticked every green box we came across, not cynically, but because we wanted to,” he says. “We built underground so that it was practically invisible, made sure it was highly insulated and used ground-source heat pumps.”

The resulting 12-week delay cost Macdonald his slot with the specialist contractor who was to build the shuttered, reinforced-concrete shell. The couple then decided to go it alone, supervised by engineers and employing steel fixers and shuttering carpenters direct. “If you don’t know what you are doing, you ask somebody who does,” he says.

The job took 18 months rather than the anticipated six, which he reckons cost them a further £150,000. This brought the total cost of the building work, which was completed in 2004, to £700,000 – on top of a bill for about £200,000 for the site. The finished house, though, is everything they had hoped for, managing to be modernist and cosy at the same time.

Off the 34ft-long living area, with its wall of glass overlooking the jaw-dropping view, is a small family nook with a wood-burning stove, separated from the main room by an elegant sliding Japanese-style cherry-wood screen built by another friend, Mark Hamilton, a bespoke carpenter. Behind the cook’s kitchen, handmade in wood, granite and slate, are the larder, utility room and downstairs loo. Upstairs, along with four bedrooms, two bathrooms with travertine marble and a full-length terrace, is a huge airing cupboard. “I don’t see how anybody can live without an airing cupboard and a larder,” Macdonald says. “Everything else is just existence.”

The self-contained annexe/orangery was a risky afterthought. By the time the necessary retaining walls had been built, all it needed was a glass front wall to make a spacious, light-filled room. Macdonald went ahead, only later applying for retrospective planning permission. This time, there was no problem.“The planning officer said he felt he needed half a bottle of gin before talking to me,” he recalls.

Magnus is certainly not a man to underestimate. He may have a cheerful hippieish demeanour and no A levels, but in 1971, as “Beau Nosh”, he was the first person to serve meat at Glastonbury – chilli con carne – and went on to manage the markets at many of the biggest festivals in Britain. Over the years, he has also been involved in a series of other commercial projects – the latest is the restoration of the Grade II*-listed Clifton Lido, which dates to 1849, making it the oldest surviving heated lido in the country.

The Power House undoubtedly cost more than Macdonald anticipated, but even if it hadn’t, it is hard to imagine him staying put for long. Before leaving, though, he is keen to perfect his unusual home. “I just keep having ideas,” he says. The latest is to plant blueberry bushes on the roof of the Power House. Luckily for Macdonald – and for the local planning officers – he won’t need permission to do that.

The Power House is for sale for £995,000 through Hamptons; 01225 312244, www.hamptons.co.uk

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