At the height of his success, in the 1970s, Robert Stigwood, who has died aged 81, was the entertainment industry’s most powerful tycoon. He produced West End and Broadway musicals that were huge hits; he turned aspiring teenage musicians such as Eric Clapton and the Bee Gees into multi-million-selling superstars; and he produced a series of films that included Saturday Night Fever (1977) and Grease (1978). Stigwood owned the record label that issued his artists’ albums and film soundtracks, and he also controlled publishing rights – not since Hollywood’s golden days had so much power and wealth been concentrated in the hands of one mogul.

Son of Robert, an electrical engineer, and his wife, Gwendolyn (nee Burrows), Stigwood was born in Adelaide, South Australia, and educated at the Sacred Heart College in the city. He worked as a copywriter for an advertising agency and then, aged 21, travelled to Britain via Asia in what he would later call the reverse direction of the hippy trail.

On arrival, Stigwood got a job in an institution for “wayward” teenage boys in East Anglia but, finding this work very unpleasant, decided to open a theatrical agency, which in 1960 signed up a young actor called John Leyton. As acting jobs were sparse, Stigwood sent him to singing auditions instead. He received a series of rejections until the pop producer Joe Meek stepped in, declaring that Leyton’s lack of vocal ability was no problem, as he was so good-looking.

Leyton was cast as a pop singer in the TV series Harpers West One, and a song he sang on the show, Johnny Remember Me, produced by Meek, topped the UK charts in August 1961. This success established Stigwood and Meek as Britain’s first independent record producers and Stigwood became Leyton’s personal manager. While Leyton was soon more in demand as an actor, Stigwood persevered with other singers, scoring small hits while making large sums as an agent and promoter. He began living a life of extravagance and gambling heavily. Then, in 1965, a Chuck Berry tour he had promoted failed to draw audiences and Stigwood was forced to declare bankruptcy.

Intent on maintaining the impression of wealth, he attended the bankruptcy proceedings in a rented chauffeur-driven limousine; and within 18 months he had achieved his biggest success. He cut a deal with Roland Rennie of Polydor, which gave him considerable freedom as a producer-at-large, and took on a partner, the former City banker David Shaw, which gave him access to funds and business advice.

In early 1966, Stigwood became the booking agent for the Who, and steered them from the Brunswick record label towards his own Polydor-distributed label, Reaction. He also began managing the fledgling British rock trio group Cream, also signing them to Reaction, and their psychedelic blues-rock proved immediately successful. Stigwood’s ability to pick and promote talent meant he was at the centre of swinging London: at one of his parties he introduced Cream’s guitarist Eric Clapton to George Harrison (and Harrison’s wife Pattie Boyd, who would later marry Clapton). But his autocratic , flamboyant nature often upset people – in 1966 Don Arden, the manager of the Small Faces, threatened to throw Stigwood from a fourth-floor balcony when he heard the Australian had taken an interest in his charges.

In 1967, Brian Epstein, manager of the Beatles, shocked the music industry when he announced a merger between his company Nems and the Robert Stigwood Agency. Exhausted by the Beatles’ overwhelming success, Epstein recognised in Stigwood a shrewd, tough operator and wanted him to take over the daily running of Nems. However, the Beatles refused to work with him and, after Epstein’s death that August, Stigwood would walk away from Nems, with a golden handshake, to set up the Robert Stigwood Organisation (RSO).

Not that he was short of work in the meantime: Cream were pioneering stadium rock in the US, and in February 1967 the young Australian vocal group the Bee Gees arrived in the UK. While many laughed at Stigwood’s claims that the Bee Gees were going to be as big as the Beatles, Stigwood soldiered on, paying for exposure of their debut single Spicks and Specks on the pirate station Radio Caroline. When this failed, Stigwood spent some £50,000 of Nems money promoting the group. By April, the Bee Gees had their first top 20 hit, and by September their first UK no 1.

Cream disbanded in 1968, and Stigwood succeeding in manoeuvring Clapton into the supergroup Blind Faith and set in motion his solo career. He also moved into theatre production that year and brought the Broadway production of the hippy rock musical Hair to London, where it generated much controversy and big box-office returns. He repeated this formula with Oh! Calcutta! in 1969 and began regularly to stage musicals on Broadway and in London. After hearing a demo of Andrew Lloyd Webber and Tim Rice’s musical Jesus Christ Superstar, Stigwood invested in the project, which started out as a concept album in 1970. He oversaw the New York stage production in 1971; and in 1973 produced the film adaptation. Stigwood worked closely with Lloyd Webber and Rice over the years, producing the stage productions of Joseph and the Amazing Technicolor Dreamcoat in 1973 and Evita in 1978; and the 1996 film of Evita.

In 1967 Stigwood purchased a controlling share in the writers’ agency Associated London Scripts, which had produced many of the best British television sitcoms. He developed the hit series All In the Family and Sanford and Son for the US, based on the British TV shows Till Death Us Do Part and Steptoe and Son.

Musically, the early 1970s were a fraught time for Stigwood, as Clapton was sidetracked by heroin addiction while the Bee Gees briefly disbanded then, on reforming, failed to make much impact with the record-buying public. Clapton cleaned up and topped US album and singles charts in 1974. Stigwood had taken his RSO organisation from Polydor to Atlantic Records and, at the recommendation of that label, he hooked up the Bee Gees with the producer Arif Mardin. Mardin’s successful reinvention of the Bee Gees as an urban disco act surprised everyone – except perhaps Stigwood – and in 1975 they scored huge international hits with the single Jive Talking and the album Main Course. The Bee Gees did not work with Mardin again, though, as Stigwood had moved RSO to Polygram.

In the same year he produced the film of the Who’s rock opera, Tommy, which was critically savaged, yet a commercial success. Then, after observing the young actor John Travolta in the US sitcom Welcome Back, Kotter, Stigwood signed him to a three-picture deal. In 1976 he read a feature in New York magazine called Tribal Rites of the New Saturday Night by the British journalist Nik Cohn and decided it could provide the perfect vehicle for Travolta’s starring debut. Stigwood developed it into the feature film Saturday Night Fever, and asked the Bee Gees to write its music. The double album soundtrack remains the biggest seller of its kind (more than 30m copies), while the film proved a huge hit and helped make disco music an international phenomenon. Stigwood then produced the film of the musical Grease, again with Travolta starring and the Bee Gees writing the theme song, which matched Saturday Night Fever’s success.

In 1978 RSO had an unprecedented nine consecutive No 1 singles in the US pop charts, and held the top spot for 31 weeks. Stigwood lived like a king: he had private planes, yachts, a castle in Bermuda and a Central Park West penthouse in New York, and was surrounded by servants and retinues.

Aiming for a cinema hat trick, Stigwood produced a big-budget musical film of the Beatles’ album Sgt Pepper’s Lonely Hearts Club Band, starring the Bee Gees, and released in late 1978. Although RSO coped with the critical and commercial failure of the film and soundtrack album, Stigwood appeared to lose focus, splitting with Clapton and producing a series of film flops. An anti-disco backlash found the Bee Gees fading from the charts; and in the early 80s, Stigwood sold RSO to Polygram.

In 1998, when Stigwood transformed Saturday Night Fever into a West End jukebox musical, he found his Midas touch had not faded.

For many years, he lived privately at Barton Manor Estate on the Isle of Wight. He made a rare public appearance at the 2006 Ivor Novello awards, where Barry Gibb of the Bee Gees described him as “the man who turned our whole industry upside down”.

• Robert Stigwood, music entrepreneur, born 16 April 1934; died 4 January 2016

• This article was amended on 6 January 2016. Jesus Christ Superstar’s West End debut was not in 1970; a concept album was released in that year.