Carlyle Hotel and the inside story of Blair's million-pound book deal

The story of the most intense publishing negotiations of the year began to emerge yesterday, as details were disclosed of the deal-making and breaking that led to a reported £4.5m deal for Tony Blair's memoirs.

Talks began during the summer and the eventual winner was Random House, but the final agreement came nearly three months after a series of leading publishers met the former prime minister at the art deco-style Carlyle Hotel in New York, where suites cost up to $6,000 (£3,000) a night.

Sonny Mehta, chairman of the US arm of Random House, disclosed that he ran into the president of HarperCollins as he went into his hour-long meeting with Mr Blair. On his way out he spotted the president of Penguin USA waiting to meet the ex-premier.

There had been huge interest in the memoirs in the United States, and Mr Blair hired a prominent Washington lawyer, Robert Barnett, to handle the negotiations. Mr. Barnett previously represented Bill and Hillary Clinton when they sought publishers.

It is understood the deal – second only in size to the $10-$12m (£5-£6m) reportedly paid for Mr Clinton's autobiography – was finally clinched in a meeting this month in London. Mr Barnett said: "This has been one of the longest and most competitive processes I've participated in in more than 20 years."

Katherine Rushton, of The Bookseller magazine, said seven publishers had expressed an interest in signing up the former prime minister, although Random House and HarperCollins were likely to have been the front-runners. She said: "Everyone wanted it. Apart from the fact that the book will sell well both here and in America, it's a big coup to be publishing such heavyweight titles."

Ms Rushton said the former prime minister might hope to sell up to 250,000 copies in the UK alone.

Mr Blair will not use a ghost writer. However, he has yet to begin work on his memoirs and, as he has no diaries to draw upon, he is not expected to finish the book until the autumn of 2009 at the earliest.

It will be published in Britain by Hutchinson and in the United States by Alfred A Knopf, which are both part of the Random House group, and will also be serialised in newspapers in both countries. Hutchinson also published The Blair Years, the diaries kept by Alastair Campbell while he was at Mr Blair's side.

The company will hope he writes candidly about his often fraught relationship with Gordon Brown, as well as the background to the invasion of Iraq. The fact that the publication date could come after the next election could encourage Mr Blair to paint a warts-and-all picture of life in Number 10.

The deal was announced by Gail Rebuck, the chairman and chief executive of Random House, who is married to Lord Gould, Mr Blair's senior pollster while he was Labour leader.

She said: "He was an extraordinary prime minister, and this will be an extraordinary book."

Mr Mehta said: "Tony Blair is one of the most significant world leaders of the modern era. He has a remarkable story to tell. His tenure as prime minister was marked by close relationships with Presidents Clinton and George W Bush, and he enjoys a profile in this country that is rare among foreign leaders."