If Julia Gillard scores an unlikely victory at the next election, there’s something she can look forward to during her next term as prime minister: Chris Mitchell retiring from his post as editor-in-chief of The Australian.

At least that’s what Mitchell predicts. The paper’s 50th anniversary in mid-2014, he says, would be the logical time to begin the handover to his heir apparent Clive Mathieson. “I’m 56 this year — I don’t want to do it forever,” Mitchell tells The Power Index during an interview in his office at News Limited’s Holt St headquarters in Sydney.

When Mitchell does retire it will be a momentous day — one that’ll have left-wingers across the land cracking open the bubbly.

For although the broadsheet is easy to write off — it doesn’t make a profit; its circulation of 130,000 is smaller than Adelaide’s The Advertiser; its audience is old and conservative — The Oz is arguably the most influential news outlet in the country. No other paper breaks so much news, puts in as much energy to destroying its enemies or devotes so many column inches to tooting its own trumpet.

It’s read religiously by politicians and public servants in Canberra, and anyone doubting its impact on the news agenda hasn’t tuned into ABC Radio or TV in the morning.

Unlike at The Age or The Sydney Morning Herald — where the role of the editor has been greatly diminished — there’s no doubt who’s steering the good ship Oz. Brisbane-bred Mitchell is an old-school potentate whose predilections permeate the paper.

“Mitchell’s authority is total,” says a former Oz staffer. “He walks out of [the daily news] conference and tells people what they’ll find out.” Says another: “I’ve never seen groupthink like I saw at The Australian.”

Mitchell, who took over as editor-in-chief in 2002, is unapologetic about the paper’s right-wing world view. “In Canberra, no matter how critical the Labor Party is right now of The Oz, it’s the paper they read and the paper they want to write opinion pieces for,” he says.

“The issues we drive are pretty mainstream. They may not be popular with the progressive inner-city left at the moment but they’re issues our readership is comfortable with. It’s easy to try to be all things to all people in a newspaper but that’s a mistake. You can never please everyone.”

During our interview, Mitchell is in a charming, effervescent mood — happy to offer free character assessments about his media competitors and even his neighbours. He notes with some glee that he lives in the inner-west suburb of Petersham, in a “street full of famous left wingers”” — including former Greens MP Sylvia Hale and Gough Whitlam staffer Michael Sexton SC.

But, according to Mitchell, it’s he who’s done the most to champion traditionally progressive causes, such as improving living conditions for Aborigines or the need for a national disability insurance scheme.

There’s no doubt he has invested in news breaking, in-depth arts coverage and reporting on indigenous affairs. Be it on the “children overboard scandal” or Kevin Rudd’s foibles, The Oz has regularly been ahead of the game.

“… I’ve never had a harassment complaint. I know some editors that have had two dozen, but I haven’t had my first yet.”

“Chris has a lot of the attributes of your ideal editor,” says The Australian Financial Review editor-in-chief Michael Stutchbury. “He’s strong-willed, has a strong grasp on his view of the world and he pursues things relentlessly.”

According to Mitchell: “I can be pretty direct but if you ask people around here they’d say I take pretty good care of them. A lot of people have an image that I’m a brutal hard-arse bastard but I’ve never had a harassment complaint. I know some editors that have had two dozen, but I haven’t had my first yet.”

But there’s no escaping his dark side. He can be petty and vindictive — from ticking off on the “outing” of a pseudonymous blogger to issuing defamation threats against a journalism academic to warning Victoria’s Office of Police Integrity that he would use “every journalistic and legal measure available” to fight it. Some hyped-up stories — like the front-page splash holding up a Bondi surfer as an expert on sea level rises — simply haven’t passed the smell test.

One journalistic heavyweight, who identifies Mitchell as a mate, describes him as “nuts” and says he “can be a real prick at times”.

“I wouldn’t trust him as far as I could spit,” says a former employee, who left on unhappy terms. “He’s the most unforgiving person I’ve ever met.” And another: “He has all these agendas and if you’re on the wrong side of one of them you become isolated very quickly.

“He has replaced good journalism with agenda-setting.”

There are signs, however, that Mitchell’s ability to influence the agenda is on the wane.

His paper still packs a punch, as seen in its coverage of dam management during the Brisbane floods or its all-out campaign against media regulation, which appears to have spooked the government. But it’s not dictating political debate like it was in the days before the 2010 election, when the mining tax battle played out on its front pages and it was hammering the government over the “Building the Education Revolution” stimulus program.

The hands-off, knockabout CEO John Hartigan has also been replaced by the cost-cutting ex-Foxtel boss Kim Williams. The Australian has been forced to make around 30 staff redundancies, with big names such as George Megalogenis leaving the paper.

Mitchell is hardly effusive about Williams — “I find Kim reasonably engaging”– but insists there is “no great schism” between them.

The boss who matters most, of course, is Rupert Murdoch — and he’s an unabashed fan of The Oz and Mitchell. “Chris has always had one-on-ones with Rupert that other editors haven’t — in the US and here,” says a veteran News insider.

For someone who’s always loved mixing it with power players, it’s an intoxicating lifestyle. We won’t believe his talk about giving the game away until he hands in his security pass.

“When I’m on holidays if my newspapers don’t arrive I’m desperate; I’m onto the newsagent straight away asking where are my papers. When I was in Turkey last year I was on my iPad trying to figure out what the paper was leading with.

“It’s all I’ve ever done since I was 17. It’s so much a part of my identity now I wouldn’t know how to do anything else.”