On 29 September 1936, William Vanneck, the right honourable Lord Huntingfield and governor of Victoria, paid a ceremonial visit to the Commonwealth Stamp Printers in Melbourne to mark the first printing of a new twopenny stamp featuring an etched portrait of King Edward VIII in his naval uniform.

It was the first of a large run due to be released into public circulation by Christmas.

Several weeks later, to mark his appreciation, the printer, John Ash, sent a sheet of the unreleased scarlet stamps to Huntingfield as a memento.

It would have been an unremarkable gesture had the king not abdicated two months later. Instead it became a bureaucratic nightmare and, 81 years later, a philatelic wet dream.

The twopenny scarlets, known in the trade as KEVIII, are the rarest and most expensive stamps produced by the commonwealth of Australia. Neither Australia Post nor the Queen have one in their collections.

There are just six in existence. This month, one of the six has been listed for auction in Melbourne on 26 June. The story of its survival rests with Huntingfield.

Edward with the woman he gave up the throne for, Wallis Simpson. Photograph: Bettmann Archive

Edward VIII abdicated on 10 December 1936 to marry the scandalously unsuitable Wallis Simpson, a twice-divorced American.

Printers in the UK immediately stopped development of new Edward VIII stamps, including limited-edition coronation stamps, and began work on stamps featuring King George VI, which were released in time for his coronation in May 1937. Convention dictated that the Royal Mail would not accept stamps showing a monarch who had departed more than 18 months before, though the rule was more lax in Australia.

When the news reached the Commonwealth Stamp Printers in Melbourne, the decision was made that all the unreleased Edward stamps – some 71m twopenny stamps and a scattering of one penny, three penny and farthing denominations – were to be burned, along with all the inks and printing plates.

The burning was to be supervised by the commonwealth auditor general, as soon as Ash could get that first sheet back from Huntingfield.

“Our instructions are that everything connected with the issue contemplated is to be completely destroyed, and all is in readiness for the Auditor-General with the exception of the sheet of stamps which His Excellently kindly consented to accept in anticipate of the official issue of the series,” Ash wrote in a letter to Huntingfield’s private secretary, dated 16 December 1936.

“We have been in communication with the postal authorities and the Chairman of the Bank in this matter, and we find ourselves in the position that we are reluctantly compelled to ask that His Excellency will arrange at his convenience to have the sheet returned to us.”

Lord Vestey watches horse racing with the Queen at the weekend. He sold the block of six stamps in 2014. Photograph: SilverHub/Rex/Shutterstock

A note bearing Huntingfield’s initials, returned by next day’s post, replied: “Sheet sent back less 6 stamps … which I mentioned over the telephone.”

Ash replied that afternoon, asking if Huntingfield could also return the block of six stamps snipped from the bottom left-hand corner of the sheet.

Huntingfield demurred. “Informed Ash that stamps had been sent to England. Thought it very doubtful if I could obtain possession.”

The stamps had been sent to Sir William Vestey, the first Baron Vestey, who had a new enthusiasm for stamp collecting, having joined the Royal Philatelic Society some months before.

Ash, unable to press the governor further, relented, and the six stamps escaped the burning and disappeared into the private collection of the Vestey estate until October 2014, when Sir Samuel Vestey, a grandson of Sir William, included them in a lot for the London auction house Spink.

Sir Samuel, the third Baron Vestey, is best known in Australia as the British landholder and cattle owner on the other side of the Gurindji walk-off in 1966.

The block of six, which had been snipped from the sheet using scissors, much to the horror of later philatelists, sold for £240,000. The original letters between Huntingfield and Ash were included in the sale.

The anonymous buyer offered a single stamp for auction in 2015, which sold through Melbourne’s Phoenix Auctions for $172,913. It was the highest price paid to date for a single commonwealth of Australia stamp.

The second single stamp, listed by the Melbourne house Mossgreen for auction on 26 June, is expected to break that record.

The remaining four are to be placed in a public collection.

While not as rare, the first King Edward VIII stamps released in the UK are also considered a curiosity. They were the first to feature a photograph, not an etching, a design choice apparently made by the king himself, who also bucked tradition by selecting a left-facing portrait despite convention dictating he should look to the right.

They were also the first stamps to feature a beardless king, a curiosity noted by contemporary Australian newspapers.

About 30m King Edward VIII stamps were sold on the first day of their release on 1 September 1936, with queues at all-night post offices awaiting the midnight release.

The Brisbane paper the Telegraph noted on 4 February 1937, two months after Edward’s abdication, that those stamps were unlikely to make much of a collector’s item. “They will not become great rarities,” it said. “Too many have been issued and sold.”

In all, 15 stamps featuring Edward VIII were released.