The Story of the Fierce Bad Rabbit was written specially for the daughter of Potter's publisher, Harold Warne. The little girl had complained that Peter Rabbit was too well behaved - she wanted to read about a really naughty rabbit.
Potter immediately wrote a story about a "fierce bad rabbit; look at his savage whiskers and his claws ... who nastily steals a carrot from a nice gentle rabbit". The two rabbits fight and the gentle one runs away and hides in a hole. But a man with a gun comes along, sees the fierce rabbit sitting on a bench and shoots him. When the man approaches the bench, all that are left are the carrot and a little white tail. The gentle rabbit peeps out of her hole and sees the naughty one running past, minus his tail.
The manuscript, which consists of a series of watercolours mounted on linen, was given to Louie Warne on her sixth birthday and has been with the Warne family ever since.
Mr Warne liked the story so much that he asked Potter to produce another version, to print from. The printed edition came folded up like a concertina, in a special wallet. Shops refused to stock it because it was hard to refold, and it was eventually reprinted in orthodox book form. The Story of Miss Moppet was also printed in the unusual format, but the original of that has been lost.
Catherine Porter, of Sotheby's books department, said it was exceptionally rare for a major Potter manuscript to come on to the market, as most were owned by the National Trust, the Frederick Warne archive or museums. The last major Potter item to be sold at Sotheby's was an illustrated letter of Jeremy Fisher, which fetched pounds 130,000.
Potter's books are all in print and have been published in 30 languages, including Lithuanian, Greek and Thai. Peter Rabbit is the best-selling children's book in the world, with sales of over pounds 10m in America alone.