Before Mike Tyson was allowed back in the boxing ring after biting a chunk out of Evander Holyfield's ear, the Nevada Athletic Commission demanded that he underwent a psychological evaluation. During the five-day examination, he told doctors how, in the run-up to the notorious night in 1997, he was "experiencing significant depression", in part because of financial problems. He owed $13m (£8m) in back taxes and had lost faith in those he had once hired to look out for his interests. "People let me down," he said. "People I would have died for."

In their conclusion, the doctors described Tyson as a man who "revealed a tendency to rely on others to a greater extent than expected, as well as naivety in these relationships". They deemed his state of mind as sufficiently fit that he would not be a danger to others inside the ring. Unfortunately for Tyson they did not pass judgment on how much of a danger he would be to himself outside of it.

But as Tyson filed for protection in the US bankruptcy court last Friday, it was clear that, where his finances are concerned, he is once again on the ropes.

"As a professional fighter who relied on others to manage his affairs, he discovered his debts far exceeded his assets," said his lawyer Debra Grassgreen. "Now he has taken the lead in bringing order to his financial affairs."

Tyson is by no means the first boxer to go from rags to riches and then back again. Joe Louis, an Alabama-born sharecropper's son, world champion and White House guest, went from being the toast of the nation to a greeter at Caesars Palace casino in Las Vegas after a life of high living and cocaine abuse.

But Tyson's lavish tastes and the chronic mismanagement that both exploited and indulged them are particularly spectacular. This is a man, once estimated to be worth $300m, who walked away from his silver Bentley convertible after a minor traffic accident in 1988. "I've had nothing but bad luck and accidents with this car," he told the police officers. "You guys take this car and keep it."

He is also a man who accuses his former manager, Don King, of loading the payroll with members of his own family and cheating him out of millions after Tyson left prison, where he had been serving a sentence for rape, in 1995. "Mike put his trust in people whom he made filthy rich," said Jeff Wald, a Hollywood agent, who is also Tyson's adviser. "Mike made a lot of people rich but they weren't satisfied with that. They wanted more. They could have a fortune legally without double-dipping on this guy."

And so ends another familiar chapter in the short and turbulent life of Mike Tyson - he is only 37 - in which he is both the subject and object of his own demise. A tale in which he finds himself in the middle of an apparently never-ending spiral of abuse, to which he contributes and from which he suffers. For, whoever else may be responsible for Tyson's present penury, it is clear that Tyson himself is not blameless. For several years he has bobbed and weaved between pleading poverty and displaying ostentation.

Last year he claimed a lack of funds prevented him from paying his estranged second wife, Monica Turner, $10m in a divorce settlement. During the proceedings it was revealed that between 1995 and 1997 he spent $230,000 on pagers and cellphones, $410,000 on a birthday party, and $65,000 on limousine services. If he was looking for somewhere to trim his spending, he might have started with his two pet white Bengal tigers, which cost $70,000 a piece, their trainer who was paid $125,000 a year to be on call, the houses and property he owned in at least four different states and valued at more than $15m, or the gardening bills in excess of $100,000.

"Everyone in boxing makes out but the fighter," he said in 1997. But Tyson didn't seem to be making out too badly when he bought a new Ferrari for $300,000 and declined to test drive it because he already had one like it. His fists earned him millions in seconds but he proved himself more than capable of spending it even faster, as he would be the first to admit: "I'm not tight with a dollar," he once said. "I'm frivolous at times."

It's just that his idea of frivolity is on a different plane to most. They shut the doors at the Versace store in the Caesars Palace mall in Vegas one day so he and his friends could go on a $250,000 spree. While visiting England in 2000, he set his heart on buying a formula one racing car. Only when it was pointed out to him that he would never be able to drive it did he relent and treat himself to a watch worth almost £1m instead.

And then there was his crew. The bodyguards, drivers, old friends and new acquaintances, whose only role appears to be to stay on the payroll. Among them is Crocodile, a camp aide whose only function was to dress in fatigues and shout "guerrilla warfare" at Tyson news conferences. Crocodile was paid $300,000 in 1996.

Tyson's insecurity always demanded that he be surrounded by people who were beholden to him, but never more so than during his three-year stint in prison following his conviction for the rape of Desiree Washington. When he went to prison in 1992, he was already in financial trouble, borrowing $1m from an annuity in order to pay his legal bills, according to court documents. It was while he was still in prison that he signed a contract on August 16 1994 making John Horne and Rory Holloway his official managers. Holloway was a friend of Tyson's from his teens in Albany, New York; Horne, a shoe salesman and failed stand-up comic, gained Tyson's confidence through a friendship with Horne's brother.

"They have my complete trust and faith to represent my best interest with anything concerning my boxing interest," he wrote. "They have the absolute right to negotiate on my behalf. No deal or commitment on my behalf will be completed without John K Horne and Rory Holloway's consent and agreement."

Little did Tyson know that, according to the Washington Post, they were being paid $20,000 a month to visit him weekly. Through them, Don King had an inside track to a man who was still a money-making fighting machine. Two weeks before he was released, Tyson signed an agreement that would give King 30% of all his earnings, as well as 10% each to Horne and Holloway. Despite claims that he was lapping up everything from Tolstoy to Mao in gaol, others say he remained barely literate and he insists that he did not understand what he was signing.

But Tyson's advisers say the shakedown did not stop there. King's former chief financial officer, Joseph Maffia, claimed in court that King was siphoning millions of dollars from Tyson. He accused King of paying his wife, Henrietta, $100,000 per fight as a "consultant's fee", his two sons, Carl and Eric, $50,000 per fight and his daughter, Debbie King Lee, $1,000 a week for running Tyson's fan club.

Tyson also had huge legal bills and divorce settlements to contend with. His first wife, Robin Givens, won a settlement of more than $10m. Last year, Monica Turner was promised $6.5m from his future earnings. He spent a second spell in prison for attacking two motorists and is currently facing assault and disorderly conduct charges following a recent brawl in a Brooklyn hotel after two men threatened him when he refused to grant them an autograph. Prosecutors were considering dropping the charge against Tyson until a security video seemed to show that having beaten them once, he took off his jacket and went back for some more.

His inability to control his temper, other people's desire to taunt him and his notoriety for making unwanted sexual advances to women make him a magnet for lawsuits. He was even accused in 1999 of abusing ferrets, after a dead rodent was found at his home, and his ongoing and strongly defended lawsuit against King, Horne and Holloway has also drained him considerably.

The trouble is that, with a character not given to commercial sponsorship, the only way he can fight himself out of financial straits is with his fists. But as he gets older, he can no longer count on this. Last June he was beaten badly by Lennox Lewis. He hopes to fight Roy Jones Junior in Nairobi in November, on the anniversary of the Rumble in the Jungle, but few expect a repeat of the Ali/Foreman spectacle.

Quite where Tyson goes from here is not clear. During his psychological evaluation in 1998, he told the doctors: "I have no self-esteem but the biggest ego in the world." The doctors concluded: "His scores are consistent with individuals who feel unhappy, sad and pessimistic about the future. They often feel guilty and self-critical and are lacking in self-confidence."

By all accounts, Tyson understands the problem but struggles to find a solution. Once, while on a walk with his tigers and their trainer, Carl Mitchell (who subsequently sued Tyson for unpaid bills), Mitchell complained about Tyson's entourage disturbing his training schedule.

"They don't give a fuck about me," Tyson told him. "They're just here for the money and to be with Mike Tyson."

Mike Tyson: a life in fights

June 30 1966 Michael Gerard Tyson is born in Brooklyn, New York. His father leaves when the boy is two.

1978 Discovers his strength when he beats up a bully who has pulled the head off one of his beloved pigeons.

1978 Arrested for purse-snatching in New York.

1982 Boxing trainer Gus d'Amato becomes his legal guardian when his mother dies.

1985 Professional debut in Albany, New York, beating Hector Mercedes in 107 seconds.

1986 Becomes WBC heavyweight champion at the age of 20, beating Trevor Berbick. Four months later wins WBA championship belt from James Smith.

1987 Defeats IBF champion Tony Tucker.

1988 Marries actress Robin Givens but files for divorce two years later.

1988 Knocks out Michael Spinks in 91 seconds, confirming Tyson as undisputed heavyweight champion of the world.

1992 Found guilty of raping Desiree Washington, a Miss Black America contestant, and sentenced to six years in prison.

1995 Released early for good behaviour.

1997 Bites Evander Holyfield's ear. Is fined $3m, and banned from boxing for a year.

1999 Sentenced to a year in prison for assaulting two motorists in a traffic incident.

2000 Fined £125,000 by British Boxing Board of Control, for striking referee John Coyle.

2002 Beaten by Lennox Lewis.

2003 Files for bankcruptcy after a $300m, 18-year spending spree.

Gemma Phillips