DEREK perches on his seat among the VIPs, eyes blazing rapturously. "Do you have any idea how huge this is for Scientology ?"

he says, reading the sign over the garlanded new Pounds 40 million headquarters of the "church of Scientology London" in the heart of the Square Mile. "For how long have we dreamed of this! It's like the tipping point. With this base, we'll be recruiting the people who control the planet !"

Behind him, beaming ecstatically despite the driving rain, an actress from Venezuela, Ruddy Rodriguez, explains how she was attracted to Scientology by my friend Tom Cruise", adding that Tom and Katie are in England this weekend" attending church events.

But suddenly, Rodriguez and the rest of

the 2,000 devotees begin whooping as, a few seats to our left, the blue-eyed American leader of the Scientologists, David Miscavige, ascends the red-carpeted dais to cut the ribbon and mark, amid an explosion of confetti, the opening of their flagship centre.

From today, bankers on Queen Victoria Street have a controversial new neighbour, one intent on luring them into what might appear to be nothing more than selfassertiveness courses. But join this group at your peril, say ex-Scientologists. For what begins as a harmless personality test invariably diagnoses you as "depressed" or "stressed", leading to hundreds of thousands of pounds in "auditing" (private counselling) fees and indoctrinating the vulnerable into a set of beliefs that become increasingly esoteric.

What - these financiers might pause to wonder - is the truth behind Scientology?

On the one hand, it is criticised as an unscrupulous money- grabbing cult, driven by the bizarre notion that humans originally came from out-of-space 75million years ago and that we are held back by our failings in past lives.

Yet on the other, it is supported by Hollywood celebrities such as John Travolta, Tom Cruise and Cheers actress Kirstie Alley, and claims to be the fastest growing religion with 10million followers worldwide.

Janet Laveau, UK spokesperson for the Scientologists, says: "We have 118,00 members in the UK, almost half of whom live in London." She predicts that "opening this new base signals a new era for Scientology in London" and that "we will double our membership in five years".

But a less grandiose picture is revealed when, posing as a potential recruit, I approach Tracey Coleman, their London communications outreach officer, who tells me: "We have 8,000 members in the UK, 2,000 in London." Is Laveau inflating the figures to make the Scientologists look more popular than they really are?

And what about their finances? At first, Laveau says the new centre is "fully funded by English parishioners' donations", but then backtracks and says "the money came from our worldwide membership".

The organisation's tax position is complicated, too, because unlike America and Australia, Scientology is not recognised as a bona fide religion in the UK and had its application for "registered charity" status rejected in 1999.

Despite this setback, the Scientologists appear to have reduced their UK tax to a minimum by chanelling activities through a company registered in Australia.

In the year to December 2004, according to accounts filed at Companies House, the company - Church of Scientology Religious Education College Incorporated - paid UK corporation tax of just Pounds 3,114 on income of Pounds 9.8 million.

The company showed net assets of Pounds 18.9 million and cash in the bank of some Pounds 5.6 million.

But when I ask why the UK Scientologists here do not record their income in the accounts of their UK-registered company, the Church of Scientology (England and Wales), Laveau promises to "get back to me" with an answer but never does.

To learn more about this mysterious organisation, I decide to join the devotees flocking on Friday evening to the 22nd anniversary of the International Association of Scientologists in the West Sussex countryside.

Here at Saint Hill, a Jacobean castle set on verdant lawns and formerly home to the group's founder, L. Ron Hubbard, who died in 1986, staff members dress in sailor suits and apparently work in total silence.

I catch their free coach laid on from their old London base, on Tottenham Court Road, and 90 minutes later find myself being corralled into a giant white marquee the size of a football stadium.

Tom Cruise is there, or so I'm repeatedly

told, among the sea of approximately 6,000 faces of all ages and nationalities.

I expect the evening to have something a spiritual dimension - after all, Scientology calls itself a religion - but what happens next is truly eye-opening.

Up front, David Miscavige is dramatically - and somewhat bizarrely - attacking psychiatrists, his words backed by clips from a Scientology-produced DVD are broadcast on four giant high- definition TV screens and sensationally called: Psychiatry - an industry of death."

"A woman is safer in a park at midnight than on a psychiatrist's couch," booms Miscavige, backed by savage graphics of psychiatrists - or "psychs" as he calls them - being machine-gunned out of existence.