Blake collection to be broken up and sold in New York

The group of 19 paintings was created in 1805 to illustrate a popular poem called The Grave by Scottish writer Robert Blair but had been thought lost until five years ago when they turned up in a house clearance in pristine condition.

The find, hailed as the most important Blake discovery in a century, led to fierce legal wrangling and an export battle. The Tate gallery in London spent months trying to raise the cash to buy them.

But it eventually conceded it could not match the asking price - which had soared to nearly £9m as word of the works' significance spread - and the Government granted an export license.

Yesterday, Sotheby's of New York announced it would sell each of the watercolours individually on 2 May in what it described as "the most important offering of works by the artist ever to appear at auction". They are expected to make more than £10m.

Sir Nicholas Serota, director of the Tate, expressed disappointment. "That a group of works that have remained together for 200 years should be split up for financial reasons means that any opportunity for scholars to see them has evaporated," he told the New York Times.

David Barrie, director of the National Art Collections Fund charity, said: "The prospect that the group may be broken up is really heart-breaking. This is a group that should have been kept together. One just has to wring one's hands," he said.

He said it was another illustration of how inadequate Britain's export controls were as a means of saving important works for the nation.

A paucity of funds for acquisitions has led to a situation where galleries scramble to find funds to match rivals' bids only when a work is on the point of being lost overseas. But only 12 per cent - by value - of works regarded as so important that they should be saved for the nation were, in fact, saved this way last year.

The watercolours were delicately drawn in pen and ink and then coloured at the behest of publisher Robert H Cromek who wanted to publish a new edition of Blair's poem, a favourite in British schools.

Blake was asked to provide 40 drawings from which 20 would be chosen for engraving in a deluxe edition.

But Cromek then decided he wanted Louis Schiavonetti, a more conventional artist than the eccentric visionary Blake, to actually engrave the works, much to the Blake's distress.

Cromek's widow inherited the watercolours when the publisher died and they were sold at auction in 1836 after which they vanished from public view.

More than 160 years later, a family clearing out the house of a deceased relative found them and took them to Caledonia Books, Glasgow, where they were noticed in 2001 by Paul Williams and Jeffrey Bates, two booksellers from Yorkshire.

They took the portfolio to a book auctioneer in Gloucestershire who showed them to Blake experts, including a Tate curator, Robin Hamlyn, who knew 12 of the images from the famous engravings but were astonished to discover seven not previously known.

The booksellers struck a deal with the Tate for about £4m. But then Caledonia Books sued for the works' return, claiming it was the rightful owner and Mr Williams and Mr Bates had taken them only on approval.

At the end of 2002, the two sides decided to sell and split the proceeds - then a London art dealer, Libbie Howie, stepped in with a bigger offer than that agreed with Tate.

The affair has left a bitter taste in the mouths of British art lovers who believe the watercolours, described by the Government as one of Blake's "outstanding achievements", should have stayed in the UK.

Although Blake did not carry out the engraving of his designs, the book was a great success and his most famous work during the 19th century.