The butler, the editor and a right royal deal

Even Piers Morgan can't believe the effect that story has had on sales, writes Sonia Purnell

The BBC said they were "old", the Daily Telegraph branded them "tosh" and a host of unnamed newspaper executives claimed they were overrated, overegged and rapidly overtaken by events.

But Paul Burrell's "revelations" about the Royal Family have now almost measured up to the once seemingly lunatic claims of Piers Morgan, editor of the Daily Mirror, the newspaper that paid £300,000 for them.

Some faintly implausible reminiscences from Princess Diana's former butler concerning an audience with the Queen and other paraphernalia may have been rapidly trumped by salacious details about Mr Burrell's own sex life and the doubtful activities of Prince Charles's courtiers, but that has not stopped the Mirror's buy-up from becoming one of the most, if not the most, successful exercise of chequebook journalism in history.

Even the irrepressible Mr Morgan himself seems taken aback by his good fortune. "We'll have sold an extra 2 million copies at least by the end of the week, raking in at least an extra £600,000 in revenue from the cover price alone. We've made another £100,000 and rising from foreign syndication rights and we've had the sort of good publicity that would normally set you back at least £2m even if you could get it," he told The Independent on Sunday as the serialisation ended last week.

"I'm absolutely staggered at how long the Burrell effect has lasted. On day one we sold 360,000 extra copies. Ten days on and we're still selling an ex-tra 140,000 copies a day, when frankly we have been squeezing the lemon pretty tightly in the past few days."

Mr Morgan believes that at least 100,000 readers a day have been directly swapping The Sun for the Mirror, and plenty of others have been adding the Mirror to their normal daily read. Even executives at News International, owner of The Sun, the News of the World and The Times, which made a reported joint £1m bid for the Burrell story but humiliatingly lost to the Mirror's lower offer, are now paying homage to Mr Morgan's coup.

"It was clearly very good value," says Brian MacArthur, who is responsible for serialisations at The Times and Sunday Times. "Piers has kept it going day after day and made the story a Mirror property. Everyone else has been writing about it so it has to be great publicity for the Mirror.

"The question now has to be how much longer will the Burrell story work? Will these new readers stick with the Mirror? They tend to be very promiscuous and may not stick around."

Mr Morgan concedes that these are impossible questions to answer. After all, The Times's own recent big buy-up – the £150,000 Edwina Currie diaries deal – produced only a temporary hike in sales, of about 48,000.

Once the public had absorbed the one killer fact – her affair with former prime minister John Major – they quickly tired of the notorious self-publicist and her book.

Mr Morgan believes The Thunderer made a mistake in paying for the story. "Edwina's kiss and tell made The Times look a bit grubby for not much in the way of extra sales. We can get rid of 48,000 copies just in Cornwall in a single day, and buying up kiss and tells could have done longer-term damage to The Times's brand."

But he argues that, in contrast, the Burrell buy-up could provide longer-lasting benefits for the Mirror than the two-week circulation blip, after a tough time for the paper (when readers were showing signs of tiring of its more serious stance).

"Here was a small guy taking on the Establishment, being knocked about by the police. It was classic Mirror stuff, and massively helpful to our brand," he claims.

"What's more, here was someone who had never spoken before but was so close to the heart of the Royal Family. So anything he said couldn't be anything but fascinating. The fact that he did not take the highest bid on the table has also played very much in his favour – and ours."

But not in News International's favour – or most particularly in the Daily Mail's. When the Burrell trial collapsed, everyone, including Mr Morgan, believed that Paul Dacre's paper had the royal butler's story in the bag. The original Mail offer of £500,000 was soon raised to £600,000 and the paper's royal correspondent, Richard Kay, one of whose children has Burrell as a godfather, was deployed to help seal the deal by makingrare appearances on television singing his praises.

"We are as perplexed as anyone why we didn't secure the rights," said a senior Mail source.

The talk of the tabloids is that the Mail's abrasive news editor, Tony Gallagher, who was in charge of the negotiations, reportedly antagonised the Burrell camp while Mr Dacre was becoming more demanding in terms of the revelations he wanted in return for his money. The Mirror saw the opportunity and grabbed it by sending its regional reporter, Steve Dennis, who was also close to the Burrells, to woo the butler away from Associated Newspapers. Under pressure from his family to drop the Mail, the paper with the largest cheque book in the land, Mr Burrell did indeed sign up with the Mirror, for half the price too.

"We had been constantly outbid for everything by the Mail. Frankly, I had been concerned that we wouldn't ever get anything again," says Mr Morgan. "They have a budget of £2m just to buy books off the market to stop anyone else running them, and then they don't even use them."

Other newspaper executives claim that the Mail has spent a similar amount on those buy-ups it has used – the memoirs of Lord Archer, Ulrika Jonsson, Tony Benn and others – but that this has had virtually no effect on its circulation.

Spending a reported £700,000 on the serialisation rights of Ulrika's book – or £400,000 as the Mail claims – was a particularly doubtful investment. While it provided some unexciting stuff about her affair with the England football manager Sven Goran Ericsson, it did not contain headline-grabbing material about her alleged rape by a fellow TV presenter.

"The Mail paid the money but didn't get the story," said one senior newspaper executive in a rival camp. "In fact, all this money on buy-ups has not stopped a fall in circulation in the latest figures."

Associated Newspapers claims the recent apparent downturn in sales can be attributed to the huge increase a year ago after 11 September. But if Mail executives hoped that a buy-up bonanza would more than make up the difference, they could well be sorely disappointed.