Children (and publishers) rejoice as author brings 1m-selling Gruffalo out of retirement

Toddlers adore it: the scary monster with a black tongue, orange eyes, a poisonous wart on the end of its nose and purple prickles all over its back.

Publishers love it even more: the Gruffalo, a mythical creature dreamed up by a 50-something mother and a German illustrator, has become a multimillion-pound cash cow.

And now a sequel is to hit the shops with a powerful marketing campaign that will make huge sums for the industry and the authors.

More than a million copies of The Gruffalo, the tale of a fearsome monster and his nemesis, a wily mouse, have been sold worldwide. The book has been translated into 26 languages since it was first published in 1999. It is the best-selling picture book in the country over the past five years.

Its author, Julia Donaldson, has until now resisted the pressure to write a follow-up. But to the relief of young fans, parents and her publisher, the Gruffalo will return in September.

The Gruffalo's Child will be one of four books for youngsters by Donaldson to be published this year. The author said: "I'm very aware that people spoil things with sequels but at the same time I don't want to be too precious about it. I was only going to do it if I got a good idea. I said I might do it if I thought of a plot. And I did."

Together with the illustrator, Axel Scheffler, Donaldson has notched up global sales of £2.5m for their many children's picture titles. Theirs is one of the most successful collaborations in publishing. The combination of her simple rhyming text and the illustrations in The Gruffalo cleared more than 600,000 copies in the UK. It has also been turned into a successful children's stage show and is playing on Broadway in New York.

In the original story a mouse fends off a series of predators by fabricating a tale that he is about to meet the mythical Gruffalo, a beast with "terrible tusks, and terrible claws, and terrible teeth in his terrible jaws". To his amazement the mouse then bumps into a real Gruffalo but manages to outwit him, convincing him that he is really the scariest creature in the wood.

The new book shows the Gruffalo recounting how he met the "big, bad mouse" and warning his daughter to beware. Nonetheless, she sets off to find the mouse.

Kate Wilson, managing director of Macmillan Children's Books, said: "She didn't want to do something that was not the equal of the first book. She is a writer of enormous integrity. But we were as keen as anyone to get another book - it would have been commercially ridiculous not to want one."

Donaldson said: "I didn't want to just write lots of jolly adventures about the mouse and the Gruffalo, I didn't want to make it sickly, with them both as buddies."

Donaldson has turned down offers to bring the Gruffalo to the big screen, worried that there might be pressure to rewrite and pad out the story.

However, she has signed a film deal for the as yet unpublished novel, The Giants and the Joneses, which will be brought to the screen by Warner Brothers, the firm behind the Harry Potter movies.