ONE of Scotland's leading businessmen, who headed the country's largest family-run furniture empire, has died of a suspected heart attack while on holiday on his yacht in the Balearics.

George S Knowles, 41, who took over the reins of the Sterling Furniture Group from his father in 1985, is believed to have been jet-skiing at Puerto Pollensa in Majorca when he suddenly suffered from chest pains and collapsed on Sunday.

Mr Knowles, who was managing director of the Tillicoultry-based firm, had just celebrated his birthday and was believed by family and friends to have been in excellent health. He lived at Dunning in Perthshire with his wife Gaynor, 35, their son George, 14, and three daughters, Lindsey, 11, Christie, eight, and three-year-old Aimee.

Last night, Linda Donnelly, wife of Dougie Donnelly - the sports presenter, who has been linked with Sterling Furniture for more than 20 years through television advertisements - spoke of the close friendship which they had with Mr Knowles and his family. They recently shared a week's holiday at Puerto Pollensa in Majorca, where the Knowles's yacht was berthed and where they also have a holiday home.

Describing his death as a tragedy, she said: ''He was an absolutely wonderful man, kind and generous. Everybody loved him and he was the life and soul of the party. He was very much the family man. We loved him dearly.''

Mrs Donnelly added: ''He was a big strong man and there appeared absolutely nothing wrong when we were with him.''

She said they had been told about his death in a telephone call from Mr Knowles's cousin, James Bain who, along with his wife Barbara, was with him on Majorca.

Mr Donnelly had been told of the news before he left for London for an engagement last night at the House of Lords. ''It'll be difficult for him because of this.''

She added that she had first met Mr Knowles when she worked at her father's advertising agency. ''It was initially through business but the two families became firm friends.''

Mr Knowles, she said, had left Morrisons Academy in Crieff, Perthshire, at 16 and gone straight into the family business.

''He worked his way up and made a huge success of it taking over the reins. He went from strength to strength.''

She said that away from the business which involved him travelling around the world he loved taking the family boat around the Balearic Islands and relaxed taking part in water sports.

He also collected classic cars which were planned to form a new attraction at the Tillicoultry furniture premises.

Mr Knowles spent many years learning the furniture business from his father, also George, who pioneered the US idea of bringing out-of-town shopping centres with extensive parking facilities to Scotland.

The famous name was established in 1974 when the family, which already operated three out-of-town shops, purchased the disused Devonvale Mills and converted it into the Sterling warehouse.

Just over 10 years later the firm was able to claim to be Britain's biggest furniture store with 160,000sq ft of retail space and attracting almost 500,000 customers a year. Other outlets were opened, including Glasgow, Uddingston, and Bishopbriggs.

In 1995 the company won the UK Retailer of the Year award - the first time the award was given to a company in Scotland.

Mr Knowles Jr made it his mission to diversify the company's range to include

cosmopolitan and exotic orders as well as the traditional stock which his family used to establish the family business.

The company held exclusive rights to a number of unique designer products including the Palmer furniture range, designed by Arnold Palmer, the golfer, and his wife Winnie.

For the past decade Mr Knowles was a frequent

overseas traveller attending trade fairs and exhibitions throughout the world from Brazil to Indonesia as well as Milan and Paris to buy up contemporary pieces by Ralph Lauren, Hulsta, and Cassina.

Obviously thinking of his love of cars, Mr Knowles was quoted in Home Zone, the company's magazine, as saying that the recent fashion in furniture for styles from the 1930s but with a modern twist was similar ''to what happened with the retro revival of cars like the Beetle and the Mini''.

Mr Knowles was also quoted in the magazine as saying the role of family businesses was undiminished. ''Most of the companies we deal with are family-run. But all new companies are vetted by visiting the factory to check on quality and value for money - always our most important criteria.''

George Knowles Sr has maintained a close watch on the company in his role as chairman. His daughters are also employed in the business. Suzanne is manager of the company's two restaurants and Lesley works as a buyer for the HomeStore Outlet.