London-based libel lawyers representing a playboy financier have sent threatening letters to bookshops around the world in an attempt to block distribution of a new book detailing his alleged involvement in one of the biggest financial scandals in history.

Free speech campaigners said the decision to threaten a book’s distributors rather than the publisher or author could be seen as an attempt to “short-circuit the legal process” around libel law and risks setting a precedent that would intimidate booksellers.

The book – Billion Dollar Whale by the Wall Street Journal reporters Bradley Hope and Tom Wright – describes how the Malaysian financier Jho Low is accused by the US government of masterminding the theft of billions of dollars from the Malaysian state-owned investment fund 1MDB, which was sent to bank accounts in Switzerland, Singapore and the Virgin Islands. It has been widely reported that Low, 36, is facing money-laundering charges in absentia in Malaysia and is the subject of an Interpol red notice.

Low insists he has not broken any laws, is not guilty of any fraud and is not being investigated. His lawyers say that the allegations in the book are defamatory and wholly untrue.

Billion Dollar Whale has received positive reviews in the US, where it is released next week. It alleges that Low gained the trust of the prime minister of Malaysia by befriending his son, evaded major Wall Street banks to siphon off funds from the investment organisation and used the money to live a life of excessive partying with celebrities and buy expensive property. Low has always maintained that his wealth was family inheritance.

Low, who was educated in the UK at Harrow school, later helped to finance the film The Wolf of Wall Street and was personally thanked by Leonardo DiCaprio from the stage of the 2011 Golden Globe Awards.

However, Billion Dollar Whale has been effectively blocked from distribution in the UK after a sustained legal campaign by Low’s London-based law firm Schillings. Although Low has not apparently commenced legal action against the book’s publisher Hachette, or its authors, the Guardian has seen letters on Schillings-headed paper that have been sent to independent bookstores in Britain and around the world in an apparent bid to stop it being available for public purchase.

The letters sent to bookstores state that the decision by some to publish a synopsis of the book constituted an actionable libel of Low. Schillings wrote to one bookseller to say it was “astonishing” that the shop had published a description of Billion Dollar Whale on its website, and warned the individual bookseller that it is “now on notice that serious defamatory material is likely to be contained in the subject book”.

“It is troubling to us to hear reports of booksellers being threatened or attempts to keep the public from reading a book,” said a spokesperson for the book’s US publishers Hachette. “Hope and Wright are journalists of the highest calibre and we stand by the book. It will be available in bookstores – in many countries – on Tuesday.”

The authors claimed that Low and his law firm did not cooperate with the book and instead were “threatening small bookshops and distributors, which is an affront to freedom of speech”.

In the UK, parliament took explicit steps through section 10 of the Defamation Act 2013 to put a stop to the targeting of booksellers who were not publishers or authors unless it was not reasonably practicable to take action against the author or publisher. Schillings have focused on the publication of synopses by booksellers as a way of applying pressure on the distribution of the book.

The move also highlights how London’s legal world remains the centre for reputation management services for the world’s super rich.

Schillings demanded individual booksellers provide a commitment in writing never to sell the book, detail proposals for compensating Low for the publication of the synopsis, and provide “reimbursement of his legal costs”. The libel law firm also told booksellers that if they did not receive a response then they would have no choice but to commence legal proceedings against the individual bookshop.

Not all of the legal warnings have been from Schillings. Jon Page, of Sydney-based bookseller Boomerang Books, said he had received two emails and a postal letter from a local Australian law firm, which used similar language to the Schillings letters: “My feeling is the lawyer is blowing smoke to get booksellers to withdraw the book even though they don’t have to. We won’t be withdrawing the book from sale.”

Been sent two threatening emails and a threatening letter saying that if we sell a certain book we will be sued for defamation. Surely that’s a publisher/author issue not a bookseller issue? — Jon Page (@BiteTheBook) September 13, 2018

No UK publisher would agree to publish the book due to libel law in the UK, according to a source with knowledge of the legal issues surrounding its publication. As a result of this decision and the legal campaign it is almost impossible to obtain a copy in the UK.

Listings for the book have been recently removed from the UK websites of Amazon, Waterstones, Foyles, WH Smiths and many independent bookstores. Clare Rewcastle-Brown, a British investigative journalist who originally expose the 1MDB scandal, has also received legal letters from Schilings over her separate book on the story, The Sarawak Report, which was also launched this week.

Robert Sharp of English PEN, the free speech campaign group that co-founded the Libel Reform Campaign, said the decision by Low’s lawyers to target booksellerswas deeply worrying. “This is surprising, concerning and sets a terrible precedent,” he said. He argued that by focussing on the synopses, “the effect of these legal letters is to short-circuit the legal process, by putting booksellers in an impossible position”.

After contacting Low for comment, the Guardian received a response from Schillings, who said they could not confirm whether Low was a client of theirs: “We do not talk about clients or matters, neither do we confirm or deny whether any individual or entity is a client of the firm.”