The million-pound book deal signed by Julian Assange to write his memoirs has collapsed, the Guardian has learned, after the WikiLeaks founder became unhappy with the process.

Assange signed a high profile deal for his memoirs in December with the Edinburgh-based publishers Canongate and US firm Alfred A Knopf, for a reported sum of £930,000. The rights have subsequently been sold in 35 countries.

At the time, Assange said he hoped the book "would become one of the unifying documents of our generation". But he also indicated that the deal was critical in helping to fund his legal fight against extradition to Sweden to face accusations of rape and sexual assault.

According to publishing sources, however, the contract has fallen through, at least in its original form, after Assange indicated he no longer wished to write the kind of book that was initially envisaged.

He is thought to have told publishers that the book, ghostwritten by the novelist Andrew O'Hagan, could give ammunition to US prosecutors, whom he fears may seek his extradition on terrorist charges relating to WikiLeaks disclosures.

A spokeswoman for the Canongate said the publisher would not discuss the book "until it is ready to", and would not make any statement until after next week, when the Australian will appear at the high court in London to appeal against a ruling in February that he should be extradited.

But she said the contract with Assange "is still very much alive, with over 35 publishers around the world committed to publishing this book". Assange did not return calls requesting comment. O'Hagan also declined to comment, as did Assange's agent, Caroline Michel of PFD.

It is not clear whether Canongate will seek to persuade Assange to change his mind or pursue the project in a different form, or whether material gathered in the course of researching the book will fall under the publisher's copyright, which potentially could allow it to proceed without his involvement. Also unclear is how much of the advance Canongate and the other publishers will recoup if the deal is not salvageable in another form.

Assange expressed discomfort with the memoir process soon after the deal was signed, telling the Sunday Times: "I have spent £200,000 for legal costs and I need to defend myself."

Assange replaced his legal team, led by media lawyer Mark Stephens, earlier this month, before he had settled his account. Asked the current financial position, Stephens said: "I'm sorry but I'm not in a position to comment."