DUSAN STOJANOVIC and KATARINA KRATOVAC

A mistress, a bogus family he said he left in the US, and regular visits to a bar called The Madhouse where he sipped wine under a picture of himself in his heyday - these were among the details to emerge yesterday about Radovan Karadzic's secret life.

Since his arrest on Monday, Serbs have been enthralled by the former Bosnian Serb leader's transformation from a suit-and-tie politician who led Bosnian Serbs into their country's ethnic bloodletting into a long-haired health guru most never imagined was living in their midst.

Genocide charges against him, and his forthcoming extradition to the UN war crimes court, have taken a back burner to every new revelation.

Karadzic's metamorphosis was so complete that many of his neighbours say they're struggling to comprehend how the friendly man they knew as Dr Dragan David Dabic was one of the world's most-wanted fugitives.

"His new life was fascinating. He hid in the open," said criminologist Leposava Kron.

Karadzic, who had been on the run for nearly a decade, had a girlfriend he presented as an associate in the alternative medicine business he ran, said Zoran Pavlovic.

Pavlovic, a software engineer, said he was hired in February by Karadzic to set up a website for him to advertise his expertise in "human quantum energy".

Pavlovic said he visited Karadzic's apartment in a grim suburb of the capital called New Belgrade once or twice a month to discuss the project. On a table, he said, was a framed photograph of four boys - all dressed in yellow LA Lakers T-shirts -who Karadzic said were grandsons living in America.

Karadzic claimed to have lived in New York City, and that he "got his diploma" in the US. "He told me he travelled often to America and I had no reason to disbelieve him," Pavlovic said.

His rented two-room flat was a mess, with things strewn about. Karadzic was always dressed in black and often complained that money was hard to come by, Pavlovic said.

"Frankly, he scared me a bit. I thought he belonged to some religious sect or something, with that beard and all, but I treated him as any other client," Pavlovic said.

Pavlovic displayed gold and silver-plated, bullet-shaped metal objects that Karadzic had given him and which he used in his healing practices to attract "cosmic energy".

Karadzic introduced the girlfriend only by her first name, Mila - an attractive brunette in her early 40s - and Pavlovic said she sometimes offered her own suggestions for the website. Karadzic remained officially married to Ljiljana Zelen-Karadzic, who lives in their family house in the former Serbian stronghold of Pale, just east of Sarajevo.

"If anyone knew who he really was, she (the girlfriend) must be the one," said Pavlovic. Attempts to track down Mila for comment were unsuccessful yesterday.

Karadzic's neighbours had only praise for him.

"He was always polite, offering his services to help my husband, who had a stroke," said Milica Sener, a neighbour who lives one floor down. "But I declined. We don't believe in alternative medicine."

Pensioner Milica Bjelanovic said Karadzic moved to the neighbourhood about a year and a half ago; she described him as a quiet man whose striking appearance - a kind of bushy beatnik Santa with long hair worn in a plaited top-knot - made him an oddity.

Misko Kovijanic, who owns The Madhouse bar in Karadzic's neighbourhood, said Karadzic was a regular who liked to sip red wine in the tavern decorated with a photo of himself and fellow war-crimes fugitive General Ratko Mladic.

The photographs hang over bottles of Serbian slivovitz plum brandy lined up on the bar, showing Mladic in combat fatigues and Karadzic, with his familiar salt-and-pepper mane, sporting a stylish suit.

"I'm very proud that he came to my pub, and I'm very sad that he was arrested," Kovijanic said.

Under his Dabic alias, Karadzic had written articles for the Serbian alternative medicine magazine Healthy Life since last October.

Its editor, Goran Kojic, who had said he was stunned when he realised the bizarre truth about Karadzic, said he became suspicious when his contributor couldn't present a diploma to back his claim of being a therapist.

"He said he had left it with his ex-wife in the States," Kojic said. The two agreed the articles would describe the author as a "spiritual researcher" instead.

Karadzic's whereabouts had been a mystery since he went underground in 1998. His various hideouts reportedly included monasteries in native Montenegro and mountain caves in remote eastern Bosnia. The US had offered a $5m (£2.5m) bounty for his arrest.

Political analyst Miodrag Stojadinovic said the identity Karadzic assumed surprised everyone because it was so far from any attempt to live in the shadows.

"He hid closest to his own profession," Stojadinovic said of Karadzic, who practised psychiatry in Sarajevo before the Bosnian war.

"His support network may have eventually disintegrated and he was left alone, but someone somewhere must have eventually betrayed him," Stojadinovic said.

Belgrade media reported yesterday that Karadzic's alias was actually taken from a Bosnian Serb who died during the war in Sarajevo in 1993.

As elaborate as Karadzic's secret life was, some Serbs still believe that the Serbian authorities long knew the war-crimes suspect's whereabouts and chose to protect him.

"I can't believe he was like a needle in the haystack," says taxi driver Zoran Mirkovic. "There simply was no political will to get him until now."