Roger Brett, 55, set up a Web site for his Garden of Eden club aimed at "liberated adults" which attracted visitors from all over Britain.

Magistrates at Cardigan in Wales were told that one woman visitor to the club at Nevern, Pembrokeshire, witnessed up to 20 people having group sex in a swimming pool.

Brett, a married father-of-two, admitted living off immoral earnings and operating a brothel. He was fined a total of £2,000 and ordered to pay £40 costs.

Maggie Hughes for the prosecution said: "One woman tipped off the police after visiting a mixed night at the club with her sister."

"Shocked and embarrassed", she spent the rest of the evening sitting in a car outside the club.

Miss Hughes said: "She saw between 16 and 20 men and women who were naked and having sex together."

Business saw hard times

Brett confessed to police and told them he had bought the garden centre 10 years ago but the business ran into trouble.

"He decided to venture into the naturist scene," Miss Hughes said,

"But he told police that people wanted more excitement and he turned a blind eye to what was going on. He said he had acted on the advice of solicitors and didn't think he was doing anything wrong."

The court was told he did not encourage people to have sex.

The defence counsel, Emma Smith, said Brett's income from the sex club was £150 a week and £500 a month from the Army pension fund.

She said: "He now accepts that what he did was illegal but he never intended to flout the law."