Bowie was given some liberty in shaping the character's image, so it's likely that the hair was his idea. There's also the fact that Nicolas Roeg saw him in Cracked Actor and thought he was perfect for the part as is, going so far as to cast not only Bowie himself, but his limo and his driver, too.
I love his haircut and color in this, but it is kinda funny that the character described in the book bears a much closer resemblance to Bowie's Serious Moonlight image, what with curly, platinum hair and a light tan. Another peculiar coincidence is that book!Newton can't see the color red. Maybe that explains it? :)