Self-publishing has traditionally been a surefire route to obscurity and dismal sales. Now a British thriller writer who sells his novels as ebooks for as little as 70p is proving the naysayers wrong.

Not only does Stephen Leather, Britain's leading "independent" writer, estimate he has occupied the number one spot on Amazon.co.uk's Kindle ebook bestseller lists for "90% of the last three months", he is also selling "somewhere in the region" of 2,000 ebooks a day – and making big profits in the process.

Leather, who celebrated his seventh consecutive week at the top of the Amazon chart with his novella The Basement, about a serial killer in New York, also occupies fourth place with Hard Landing, another thriller, and 11th place with Once Bitten, a vampire novel.

He is one of many authors increasingly turning to ebooks as an alternative way to the top. Capitalising on the popularity of e-readers such as the Kindle, a new generation of writers is bypassing agents and publishers and using the flexible pricing model of ebooks to offer their work directly to the public at rock-bottom prices. Some, like Leather, are achieving huge sales, which, not surprisingly, is striking fear into publishers.

Leather enjoys a successful parallel career writing "big international thrillers" for Hodder & Stoughton. But last August, when Amazon.co.uk opened its Kindle store, he saw an opportunity: "I was lucky, in that I had three novellas Hodder had turned down because they were in a different genre from my other books and too short to work as conventional paperbacks. But I realised they might work for the Kindle."

Leather realised the Kindle was going to be "pretty much the most popular Christmas present ever. It occurred to me that on Christmas morning, when people got their Kindle, the first thing they would do would be to buy the books they'd always wanted – The Girl With the Dragon Tattoo, the new Grisham. But they're relatively expensive. After that, people would start looking for cheaper books. I figured that if I could get several of my books in the top 10 or top 20, then when people started looking around for bargains I'd be perfectly placed."

To maximise sales, he priced his books at Amazon's minimum for independent writers – about 70p (the equivalent of 99 cents). At this level, authors receive a cut of only 35% of the price; under Amazon's pricing structure, this rises to 70% if they price their books above the equivalent of $2.99. He then went on various forums to drum up awareness. Within a couple of weeks, all three titles were in the top 20 and "by November I'd knocked Stieg Larsson off the top spot".

"I knew the wave was going to break on Christmas Day. I got myself in position to take advantage, I got on and I've been riding it ever since."

Yet while he is making significant sums just through ebook sales – "up to £11,000 a month" – he still only sees it as a sideline to his main writing career. "I never went into this to make money. I went into it as a way of widening my readership. My hope was that readers would read my book on Kindle, say, 'I really enjoyed that', then when my new thriller came out with Hodder, they'd remember it and buy that too."

Leather's achievements are dwarfed when set against the scale of independent publishing in the US, where ebooks are estimated to be 20% of the total market. The most spectacular example of an author striking gold through ebooks is 26-year-old former care assistant Amanda Hocking, a Minneapolis-based writer of paranormal romances. She had completed eight novels but had failed to acquire an agent when, last April, she decided to publish them herself via the Kindle store.

"I sold 50 books the first month. It picked up over the summer, then really took off in November," she said. Hocking is now the world's bestselling ebook author, selling more than 450,000 titles last month alone.

Hocking admits that failing to get published by the conventional route worked to her advantage. "It allowed me to put a lot of books on the market quickly, so if people liked them, they could immediately buy another." Her bestselling Switched, the first of a trilogy, has sold nearly a million copies. "I didn't expect it to be anything like this. I was hoping for around 10% of where I am now."

Faced with this deluge of ultra-cheap ebooks, there have been apocalyptic murmurings about the end of publishing, but Toby Mundy, managing director of Atlantic Books, remains cautiously upbeat. "A new ecosystem is emerging where it will certainly suit lots of authors to publish themselves, but it won't suit all or indeed most of them," he says. He points out that for many authors it would "be too stressful to become marketers and distribution experts and copywriters as well as writing the actual books".

The real test is whether the self-publishing model becomes attractive to the "global megastars – authors such as James Patterson, for example".

Such a development, he says, would be a bit like Hollywood stars going into film production in the 1990s. "It didn't bring down the studio system, but it certainly changed it. The real question is, can the established houses continue to create the incentives for the big stars to stay?"