It sounds like a film: a single mother traipses the rainy city streets, pushing her newborn baby in its pram. With the baby asleep, she sits in cafes drinking coffee and scribbling a children's story.

Cut to three years later and the young mother has sold her finished story to a publisher for £100,000, two Hollywood studios are interested in the story, and she has just delivered her second book.

But this is no film. Harry Potter And The Philosopher's Stone, by penniless divorcee Joanne Rowling, is the talk of publishing.

The sale of the manuscript for such a sum, arranged by her literary agent Christopher Little, is unheard of for a children's author. Rowling is now being talked of in the same hushed tones as Nicholas Evans, whose debut novel The Horse Whisperer was sold to Hollywood for £350,000 before it was finished.

And Harry Potter, the hero of the tale, could assume the same near-legendary status as Roald Dahl's Charlie, of chocolate factory fame.

The eponymous hero of Harry Potter And The Philosopher's Stone is an orphan who is brought up by a cruel aunt and uncle. He discovers he is a wizard and passes through a time warp into a world of make-believe.

Reviews for the 80,000-word novel have been ecstatic, with the Scotsman lauding it as 'an unassailable stand for the power of fresh innovative story-telling in the face of formula horror and sickly romance'. Rowling is planning six more books featuring the further adventures of Harry Potter.

The book has provided its author with an escape from the daily drudge of her life in Edinburgh. 'I was very depressed and having a new-born child made it doubly difficult,' said Rowling, 31, who was raised in the Forest of Dean, and graduated in French and Classics from Exeter University.

'I simply felt like a non-person, I was very low and I had to achieve something. Without the challenge I would have gone stark-raving mad.'

With the book finished she approached an agent. 'I didn't know anything about agents but I went to the library and looked up some addresses. Christopher Little was only the second one I wrote to.

'I remember getting a letter back. I assumed it was a rejection note, but inside the envelope was a letter saying, 'Thank you. We would be pleased to receive the balance of your manuscript on an exclusive basis.' It was the best letter of my life. I read it eight times.'

The agent then sold the manuscript to New York-based Scholastic Press in an auction. 'Christopher told me there was an auction going on and that 10 companies were involved. I did not know what kind of figures we were talking about. I thought perhaps thousands but not a six-figure sum. I was astonished. The first feeling was profound shock. I was temporarily paralysed at the time.'

Rowling, who left her Portuguese husband, survived on benefits and did some part-time clerical and teaching work but couldn't afford a word processor.

'I was writing for me. For someone to offer that amount of money for something that I had written because it is the sort of thing I like reading was incredible,' she said. 'I don't know what I'll do now. I'm very nervous of just packing in my part-time teaching and becoming a full-time author, even though that is something I have always wanted to do.'

New York's Scholastic book club has 80 million members, which should ensure that Rowling can face the future with some confidence. Her agent praised the young writer: 'For a one-book deal for a first-time author, this is staggering but it is such a good book. She is such a wonderful, original voice. Her imagination is so lateral. You just keep going 'wow' when you turn the page, thinking where did that come from?'