'SET EUROPE ABLAZE'

It was an unlikely beginning. The St Ermin's was – as it remains – a respectable hotel on Caxton Street tucked away off Victoria Street in the heart of Westminster. But in the summer of 1940, with the Luftwaffe launching its first heavy bombing raids on London, it was hardly the most secure of places. Nor, despite its ornate central stairway and baroque Victorian interior, did its decor suggest anything special. The writer and wartime spy Malcolm Muggeridge wryly found it dim and quiet, 'suggestive of conferences to promote world government, family planning, or the practice of eurhythmics. Nonetheless, in three gloomy rooms of its fourth floor, as Adolf Hitler planned the invasion of Britain and Winston Churchill promised to fight on the beaches, a handful of men hatched a campaign of European-wide sabotage, subversion and revolt. Soon the plotters expanded and took over the top three floors of the hotel.

Who they were, no one quite knew. If asked, they sometimes said they belonged to the Admiralty; at other times to the Army or Royal Air Force. Occasionally they claimed to be from something called the Inter-Services Research Bureau, which helped account for the variety of uniforms passing in and out of the hotel. Anyone looking for this shadowy organization's number in the London telephone directory ended up frustrated, for it was unlisted. Nor did their stationery carry the St Ermin's hotel address. But, using this modest hotel as a mysterious and deliberately confusing cover, the team became global in its span, with regional headquarters in such places as Istanbul, Cairo, New Delhi and New York. This was the first home of what history now knows as the Special Operations Executive, or SOE.

On 16 July 1940, Hitler signed his Führer Directive No. 16 for the planning of Operation Sealion, the invasion of Britain. That same night Churchill summoned his Minister for Economic Warfare, Hugh Dalton, to a midnight meeting at 10 Downing Street. The collapse of France and the débâcle of Dunkirk had left Hitler in command of Europe. Now urgent discussions were under way in Whitehall about a top-secret organization intent on sabotage and subversion behind enemy lines, to spark revolt, and undermine Hitler's Europe from within. Churchill gave Dalton, who had been lobbying hard for the position, charge of the new agency. As he turned to leave, Churchill commanded him: 'And now set Europe ablaze.' The War Cabinet endorsed Churchill's decision one week later.

Dalton was a large man with immense energy, a powerful conviction that he was usually right, and an irrepressible urge to provoke his opponents. One of his subordinates recalled that his voice was penetrating and that when he was angry his eyes used to roll around 'in rather a terrifying way'. Nicknamed 'Dr Dynamo', he had been a vigorous opponent of appeasement during the 1930s and believed fervently in the need to use 'ungentlemanly warfare' to defeat the Nazis at their own game. He argued that Britain must organize movements in every occupied territory comparable to Sinn Fein in Ireland, the Chinese guerrillas fighting the Japanese, the Spanish irregulars who'd defeated Napoleon in Spain and – 'let's face it' – the subversive organizations run by the Nazis themselves in Europe: 'We must use many different methods, including industrial and military sabotage, labour agitations and strikes, continuous propaganda, terrorist acts against traitors and German leaders, boycotts and riots.'

This enthusiasm had made him an obvious candidate for running SOE, and he had high expectations of what he could do; but there were two problems. The first was that Churchill disliked him. The Prime Minister had witnessed guerrillas in action as a young soldier and war correspondent and was a fellow enthusiast for secret war. But he regarded Dalton with deep suspicion. Dalton's father had been the Canon of Windsor and tutor to the future Kings Edward VIII and George VI, and Dalton literally grew up in the shadow of Windsor Castle. Not surprisingly, he'd also gone to school at Eton, only a stone's throw from his childhood home. Yet Dalton's political career was built on attacking the very wealth and privilege that had nurtured him. He became an ardent socialist, a fiery lecturer at the London School of Economics, and by 1940 he was one of the most powerful men in the Labour Party. As an intellectual socialist he aroused all Churchill's dislike of the class traitor. 'Keep that man away from me,' he once said. 'I can't stand his booming voice and shifty eyes.' He was far from Churchill's first choice for the job. But as head of a coalition, the Prime Minister had to throw a bone to Labour to balance Conservative control of the Foreign Office. During the crucial period that SOE struggled to get up and running, Dalton suffered from the handicap of having no easy access to Churchill. It was testimony to his enormous determination that SOE even survived these early days.

Dalton's second problem was that he had very few weapons at hand to set Europe ablaze. Late in the 1930s Hitler's takeover of Austria prompted the Secret Intelligence Service (SIS) to create a special unit to carry out dirty tricks against the Nazis. Known as Section D ('D' for destruction) and run by a flamboyant army major named Lawrence Grand from offices at 2 Caxton Street, next door to the St Ermin's Hotel, it had devised plenty of imaginative schemes, such as destroying the Rumanian oil fields, blocking the Danube by blowing up the Iron Gates, a narrow gorge on the river, and sabotaging iron ore exports to Germany from Sweden.

But there had been few results. In the War Office a small subdivision of Military Intelligence under an inventive genius named Jo Holland had carried out research on paramilitary warfare under the designation MI(R) but had not yet moved from planning to action. And attached to the Foreign Office was a shadowy organization known as 'EH', for Electra House, which dabbled in subversive propaganda – what Dalton described as 'leaflets, whispers, rumours, secret wireless transmitters and so forth'. Subsisting on tiny budgets, lacking co-ordination, these three small secret units had barely scratched the surface of what needed doing. But they provided the unlikely building blocks of SOE.

Once in charge, Dalton moved with his customary energy. After reviewing the scene he briskly concluded that 'the selection of the right men is even more important than the creation of the right machine'. He relentlessly employed the old boys' network to form the kernel of a central staff. The main nucleus came from Section D. Many were bankers, businessmen or lawyers with international contacts who knew how to move money and fix deals. One of the most important was George Taylor, a ruthless Australian with business interests around the globe who had worked tirelessly for Section D in the Balkans. He specialized in subversion in neutral countries. Even Dalton was forced to admit he was 'always belligerent, persistent and ingenious' and 'as clever as a monkey'. Bickham Sweet-Escott, a banker from Courtaulds, played a similar role and left one of the best accounts of SOE ever to have appeared, under the title Baker Street Irregular. Charles Hambro, of the banking family, had powerful connections in neutral Sweden and throughout Scandinavia which SOE used to excellent effect. From the top City solicitors, Slaughter and May, came Harry Sporborg and Jack Beevor, the former to oversee operations in western Europe, the latter as SOE chief in Lisbon a neutral capital rich in intrigue and subversive possibilities. Others came from the Foreign Office, such as Gladwyn Jebb, who proved valuable in resisting his fellow diplomats' desire to strangle SOE at birth.

Civilians accustomed to order, now this small band of warriors had disorder and chaos in Europe at the top of their agenda. Angus Fyffe, who joined SOE in 1941, recalled the atmosphere of these early days: 'Quite informal, they were all jolly lads together. You see, we must remember that at the outset SOE was composed of representatives from Courtaulds, Hambro's Bank, they were all civilians, lawyers, men of the City, and there was almost a black jacket, striped trousers, briefcase air about the place.'

Dalton chose Sir Frank Nelson as SOE's first Executive Director. After a successful career as businessman and Conservative MP, he had served as Vice-Consul at Basle, Switzerland, a post traditionally providing cover for the Secret Intelligence Service. He installed himself in a serviced flat close to the St Ermin's, spent seven days a week in his office from a quarter to nine to midnight, and single-mindedly devoted himself to building SOE from scratch. This eventually exhausted him and he was forced to quit the job after eighteen months.

But by far the most important appointment in the long term was that of Brigadier Colin McVean Gubbins, a professional soldier, as Director of Operations and Training. Throughout SOE's many trials and tribulations and behind nearly all its triumphs, Gubbins acted as the indefatigable mainspring and source of inspiration. Eventually, in 1943, he became Executive Director.

Gubbins was already in his mid-forties, a soldier with an unorthodox past. Born in Japan, he had served with the Royal Artillery in the First World War and as ADC to General 'Tiny' Ironside, commandant of the anti-Bolshevik expeditionary force to Archangel after the Russian Revolution. Then in Ireland he had encountered the guerrilla tactics of the IRA and become a convert to the power of irregular war. In 1938, working with Jo Holland in MI(R) in the War Office, he helped draft a handbook on guerrilla war and a companion text for partisan leaders, full of practical advice on how to organize an ambush and what to do with enemy informers ('kill them'). When Britain sent a military mission to Warsaw immediately prior to the outbreak of war he headed its guerrilla war and behind-the-lines resistance section. After Poland's defeat he raised special commando-style units during the Norwegian campaign. At the peak of the invasion scare he masterminded plans for behind-the-lines resistance in a Nazi-occupied Britain, the so-called 'Auxiliary Units'.

A shortish, dark man with clipped speech and a brisk mind, he made an immediate impression on those who met him. Bickham Sweet-Escott described him as 'a man of immense energy and vitality with a quick wit, and an imagination rare in a professional soldier. He enjoyed life to the full; he never forgot a face or a name, and he had a gift for inspiring confidence in those working under him. He was in fact a born leader of men.' Peter Wilkinson, his military assistant and biographer, also stressed Gubbins's power of leadership as well as his popularity among younger officers: 'He was a wonderful leader of the young, whom he inspired, and of course in SOE found his niche because resistance was essentially a young man's job. He had an imaginative temperament, really quite visionary, and was a very efficient soldier in the technical sense.'

Angus Fyffe felt much the same: 'A charming man but a very efficient and brusque officer. You didn't take risks with Gubbins because you wouldn't have got away with it, but a very highly intelligent and kind chap.'

Gubbins arrived at SOE with a concept. His military experience had brought him particularly close to the Poles. Their country was now occupied by the Nazis but already resistance was stirring. The Polish government under General Sikorski had moved to London and was talking enthusiastically of its secret army at home. Even before the Nazi invasion, Gubbins had discussed with the Polish General Staff possible underground resistance and he shared the Poles' optimism.

Dalton was a ready convert and put Poland high on his list of priorities. On a visit to the Polish Army in Scotland over Christmas 1940 he brought the roof down with a stirring talk. On the day of victory, he declared, Poland – as the first nation to stand up to Hitler while others grovelled on their bellies – should ride in the vanguard of the victory march. If SOE could equip its Home Army (as Poland's secret army was known), then it would spark a major uprising at the moment of liberation.

Not surprisingly, Poland took up much of SOE's energy in its early months. Within the Polish General Headquarters at the Hotel Rubens in Buckingham Palace Road, its VI (Intelligence) Bureau selected and trained a small group of officers who had volunteered to be parachuted back into Poland. Working closely with the head of SOE's Polish section, Captain Harold Perkins, another of Gubbins's protégés from the War Office, they planned a flight for December 1940. After two false starts, it finally succeeded on the night of 15 February 1941. A two-engined Whitley aircraft, modified to carry a special auxiliary fuel tank for the fourteen-hour round-trip, successfully dropped three Polish parachutists who safely made it secretly into Nazi-occupied Warsaw. Peter Wilkinson described the importance for SOE of this flight.

This was the first connection with occupied Europe. It was in itself an extraordinary feat to fly blind across occupied Europe at about 120 miles an hour in the depths of winter and to find a dropping zone and to get back. The whole flight took about fourteen hours and it was a notable feat of navigation and endurance. This in itself was terribly important, to find out that one could do it. Secondly it was really vital at that time to try to convince very doubting chiefs of staff and a very sceptical Whitehall that this sort of thing was feasible at all.

Dalton was elated – it fuelled his enthusiasm for supplying the Polish Home Army with vast supplies. He proposed similar ideas for the Czechs. Yet the mission in reality showed how difficult this would be. Once the dark winter nights yielded to long summer evenings, flights across occupied Europe became terribly exposed. In any event only a handful of planes were at SOE's disposal and all would have required special modifications. In fact, such a flight was not to be repeated for another twelve months. It was simply impossible to supply the Polish Home Army on the scale envisaged from bases in the United Kingdom.

Gubbins was quick to draw the lesson. If SOE were to produce results, operations would have to be closer to home and on a more modest scale. Moreover, SOE would quickly have to get hold of adequate transport to deliver its agents to the field.

Meanwhile, in October 1940, SOE moved its burgeoning staff from the modest St Ermin's to a large modern office block at 64 Baker Street, stamping ground of the fictional supersleuth of an earlier fight against evil, Sherlock Holmes. Its propaganda section, known as SO1, was based at Woburn Abbey in Bedfordshire. Twelve months later this was split off to form an entirely separate agency, the Political Warfare Executive, and played no further part in the SOE story. From now on 'Baker Street' referred to SOE headquarters.

As it expanded, its premises relentlessly colonized Marylebone. It took over Norgeby House, at 83 Baker Street, and then spilled over into the top floor of No 82, Michael House, the corporate headquarters of Marks and Spencer. Nearby streets and blocks of flats such as Dorset Square, Orchard Court, Montague Mansions and Chiltern Court housed SOE's various country and technical sections.

Sir Frank Nelson and his team continued their urgent search for staff officers and field agents. There was no real system. Advertising was out because secrecy was paramount. Instead, discreet approaches were made to the armed forces for people with foreign languages who might be interested in 'special' wartime service. Ernest van Maurik's experience can serve as an example:

I was in the Wiltshire Regiment and had been since the beginning of the war. At the end of 1940 I was on the beach at Folkestone waiting for an invasion that one more or less knew was not going to come. I was called up to my commanding officer who said, 'I've got to send you up for an interview – it ought to be somebody with a certain amount of weapons small-arms training, you're the only junior officer. So you go, and if you don't like it, come back.'

Well, I got up to London in Horse Guards parade. There were a lot of other people being interviewed. The interviewing officer said, 'I see you've got a Dutch father, so you must speak Dutch.' Actually my mother had always discouraged my father from teaching me any real Dutch. I eventually persuaded him that I didn't speak Dutch, so he said do I speak any other language. I said French and German. They said it'll be interesting work if we select you and you will get instant promotion to lieutenant. It had been mentioned that it might be to do with training foreign troops so I thought probably it was something with the French troops who had escaped at Dunkirk, but I didn't think for a moment it had anything to do with infiltration into France, all that sort of thing.

Angus Fyffe was also unimpressed with his first interrogation about his language skills.