Arts council in the UK, where Banksy mural went missing, petitions for return of artwork as auction moves forward

The owners of a Miami art house have pledged to press ahead with the controversial auction of a mural by the secretive British street artist Banksy that disappeared from a London wall in mysterious circumstances.

Unknown hands prised the artwork, entitled Slave Labour and showing a small barefooted boy making Union Jack bunting in a sewing machine, from the wall of a Poundland shop in Wood Green last week.

Soon after, it turned up on the online catalogue of Fine Art Auctions Miami where its estimated price was listed between $500,000 and $700,000 for Saturday's Modern, Contemporary and Street Art sale.

An employee of the auction house told the Guardian that it would definitely be among the 116 pieces going under the hammer, despite vocal protests from the UK.

"Fine Art Auctions Miami has done all necessary due diligence and unfortunately is not able to provide any [further] information or details," the company, founded by New York-based European art specialist Frederic Thut, said in a brief statement.

"We would be happy to do so if you can prove that the works were obtained illegally."

The employee refused to say if the artwork was yet in Miami, deepening the mystery over who is set to cash in from the sale of the 1.2m x 1.5m slab of concrete and how it came to be in the hands of an auction house 4,500 miles away from its London home.

Alan Strickland, a Haringey councillor who has launched a campaign to halt the sale, has written to the Arts Council seeking an urgent ban on the artwork's export.

The mural, which appeared last May, shortly before Queen's Diamond Jubilee, was, he said, "a fantastic piece of public art" despite its interpretation as a condemnation of the celebrations.

"People all over the country are rightly disgusted that a gift to the community could be privately sold for huge profit in this way and are demanding that the auction house abandons or postpones the sale and returns the artwork to Wood Green," he said in a letter to Sir Peter Bazalgette, chairman of the Arts Council of England.

He added that he had spoken to the owners of the building occupied by the Poundland shop today but that the situation was still unclear. "Still on the case," he tweeted.

But there is understood to be little the Arts Council can do as the mural is less than 50 years old and so isn't subject to export control under current regulations.

A spokesman said: "We believe all art, whether viewed in a gallery, museum or in the everyday urban environment, should be valued so it is a shame that a piece of street art that is well loved by the local community has been removed for auction. We understand that Haringey Council is currently investigating how the removal occurred and we await the outcome of their investigation with interest."

Adding to the intrigue is the silence from Banksy, the reclusive and enigmatic artist who has who has always refused to sign his work out of fear of being prosecuted for vandalism, and who has never sanctioned the sale of his works at auction.

Slave Labour appears among the images of artwork on his website but inquiries to Pest Control, his official "handling service", were not returned. A statement on its website says: "Pest Control is the sole point of sale for new work by Banksy, of which there is currently nothing available. Banksy is not represented by any other gallery or institution."

This is the second time in three months that the appearance of Banksy artwork in Miami has caused controversy.

In December, Stephan Keszler, a gallery owner from the Hamptons, shipped five pieces to his Banksy Out of Context exhibition at Art Miami, one of the country's longest established art fairs. But the show drew widespread criticism because it was staged without the artist's permission.

Banksy issued a statement through Pest Control condemning a similar Keszler exhibition in New York the year before because the works had been removed from their "contextual surroundings" without authority. None of the pieces, with asking prices up to $750,000, sold, and they were not put up for sale again when they were shown in Miami.

Keszler, who said he had no involvement in Slave Labour coming to Florida this week, defended the auction house and its right to sell the artwork. "No crime has been committed in any of this," he told the Guardian.

"I admire Banksy's work, he is a genius. [But] he does something on other people's property without asking. The owner of the property can do whatever they want with it. Why should the auction house reveal who is behind it?"

He said that the controversy had generated huge international publicity for Banksy's artwork. "There are some people who play the game well and make a lot of money," he said. "But I am always surprised at how emotional people get about it."