Kid Creole: 'I'm not a party man any more'

^'It was handwoven," says Kid Creole, grinning at his fedora, which tops off the sort of outfit that was his trademark in his 80s heyday: high-waisted trousers, box jacket with wide lapels, shirt with upright collar, thickly knotted tie, and two-tone shoes. "Very expensive," he adds.

Kid Creole, aka August Darnell, is now 61, and sits before me in a hotel in London. At their peak, his band made a lot of money, thanks to such irresistible hits as I'm a Wonderful Thing Baby, Stool Pigeon and Annie, I'm Not Your Daddy, all perfectly crooned by Darnell. "I made so much dough and wasted so much dough," says Darnell, his accent still unmistakably Bronx, despite the fact he has lived in Britain and now resides in Scancinavia. "I bought houses and cars and made investments in clubs. I learned how quickly you can lose one million dollars. Thank God I wrote those songs – I could live off the royalties to Annie alone – because if I didn't, I'd be in the poor house."

The self-styled Tropical Gangster – who brought flamboyance, colour and calypso to pop – had actually earned and lost a million before he'd even formed Kid Creole and the Coconuts. In 1976, he and his elder brother reached No 1 in the US as Dr Buzzard's Original Savannah Band with the single Cherchez La Femme. This mixed disco with the imagery and lush orchestrations of 40s swing. His brother's weakness was drugs, Darnell's was women. "They were my tragic flaw," he says. "Flying this one in, buying them presents. It was ridiculously addictive behaviour."

Dr Buzzard and Kid Creole satirised the high life at a time when America was ravaged by recession. "It was huge satire," says Darnell, an astute observer of pop who has a masters degree in English. He intended to become a teacher – a fact that belies his reputation, in the guise of Kid Creole, as a zoot-suited wise guy surrounded by scantily clad Coconuts. "I'm a capitalist and I love money, but originally we frowned on it – the idea of the elegant elite. Then we became the thing we made fun of."

It's easy to forget, following years of appearances on 80s-themed tours and his involvement in the Oh What a Night! retro-disco musical, that Darnell was at the forefront of club culture in the early 80s, paving the way for Culture Club, ABC and Haircut 100. Signed to the none-more-hip ZE label, the band made a debut album, Off the Coast of Me, that was greeted like the second coming by a UK music press weary of dour post-punk.

"It was reviewed like Sgt Pepper," says Darnell, who recalls virtually "living in NME", so frequently did he appear in it. His band offered an exotic escape from the riot-torn summer of 1981. As the title of a ZE compilation put it, this was Mutant Disco and Darnell, with his messed-up funk, was its leader. "I remember walking through Covent Garden, hearing songs from Fresh Fruit in Foreign Places [the band's second album] on every radio and feeling like a conqueror."

With Tropical Gangsters, the third album, which appeared in 1982, Kid Creole became a household name. "People would stop me at airports and sing the 'ha cha cha cha!' bit from Stool Pigeon," he says. Eventually, the hits dried up, and this quintessential New Yorker found himself living in Urmston, Greater Manchester, with a woman he'd met during the recording of a show at Granada TV. Now, after a stint in Denmark, he lives in Sweden, with a new partner – and his wild times firmly behind him.

"It's what I need after the crazy touring life," he says. "Complete tranquility. I'm not a party man any more, and for the first time I'm monogamous." He smiles. "It might be my greatest accomplishment."

Perhaps. There is all that fabulous music, though. And he's still making it, in a studio at the back of his house. The new album, I Wake Up Screaming, the first Kid Creole and the Coconuts LP for 14 years, is a typically quirky collection of idiosyncratic funk and quixotic disco. As a collaboration with Andrew Butler of Hercules and Love Affair, it also unites two eras of NYC clubland: 1981 and 2011. Darnell says it's the best thing he's done since the debut Dr Buzzard album 35 years ago.

"I've struggled my whole career to reach the heights achieved on that album. This has come the closest. One reviewer said it was my finest work. I was really flattered. It isn't. But my next one will be."