They died about 67m years ago, locked in combat in what is now Hell Creek in Montana. Their entwined bodies were covered by layers of soil and rock, they decayed, became fossilised and lay hidden until, in 2006, a dinosaur hunter found the bones sticking out of the hillside on a ranch.

The Montana Duelling Dinosaurs, which will go on sale at Bonham's in New York, are expected to fetch in the region of $7m-$9m (£4.4m-£5.7m). They are some of the most complete and perfectly preserved dinosaur skeletons ever found. They are also scientists' best way to answer one of the biggest questions in palaeontology: was there another, smaller, top predator that roamed this part of the world in the late Cretacious age 65m years ago, alongside the fearsome Tyrannosaurus rex?

Scientists have found fragments of the so-called Nanotyrannus lancensis before but have never been able to agree whether these represent a new species or just a younger T rex. The nanotyrannus had first been proposed in 1988 but, until 2006, they had never had access to such a complete skeleton.

Philip Manning, a palaeobiologist at the University of Manchester, was allowed to examine the fossilised creatures and presented his analysis at the British science festival in Newcastle on Monday. He said the nanotyrannus would have had a long, swan-like neck and a long skull. Its forearms were of a similar size to T rex, despite its body being less than half the size of the bigger predator.

"Maybe if you think of the savannah of Africa today – the lion's taking down the big prey and the cheetah is taking down the smaller prey – maybe we're looking at the cheetah of the Cretaceous here. We've got similar niche partitioning happening within the ecosystem that existed some 65m-67m years ago."

The other creature in the Montana fossil is a Chasmosaurine ceratopsian, a creature similar to a triceratops. Both would have measured about 2.5 metres (8ft) high and about 9 metres long, with the herbivorous ceratopsian considerably heavier than the nanotyrannus, which would have had hollow bones, much like a modern bird. Teeth from the nanotyrannus were found embedded in the neck of the ceratopsian, suggesting the two were fighting when they died.

Though fragments of nanotyrannus have been found before, Manning said that the Montana fossil is the best evidence yet that this predator is a new species, rather than just a juvenile form of T rex, which is the suggestion from some palaeontologists.

Michael Benton, a professor of vertebrate palaeontology at the University of Bristol, said that although fossils were bought and sold all the time, "the risk with some heavily hyped sales, such as this sale of the nanotyrannus specimen, is that a private purchaser might wish to keep the specimen for their own use. "If it is in a private collection, it cannot be studied scientifically. Nearly all scientific journals require that specimens studied scientifically and published must be freely available for further study by others, and this means an accessible, public collection. This is a basic tenet of science: the need to make all published work repeatable."

Jack Ashby, manager of the Grant Museum of Zoology at University College London, said scientific institutions were often priced out of the market on the biggest sales. "Even if a private buyer allows scientists to study something after the purchase, there is no way to control what happens to it later," he said.

"Palaeontological research might begin with the original description of a fossil, but very often new debates arise years, decades and centuries later and the specimen needs to be revisited. If the fossil moves into private hands, this could very easily become impossible."

Manning said he hoped a museum would be able to acquire the nanotyrannus so that scientists could study it further and finally decide whether or not it was a new species. "We see bits of art going around the world and everyone accepts that. We go on about how a piece of art is worth so much," he said.

"When something as precious and priceless and wonderful as this [fossil] comes on to the market, we start wittering and worrying about where it's going to go and why it should be sold at all."

He added: "The fossil record is incomplete and, even when you've studied something as much as the Hell Creek, it's fragmentary and you get these tantalising glimpses, the odd sentence, the odd word. This fossil is a full-blown chapter of information. That's so rare."

Money for old bones

According to David Norman, who was until recently the director of the Sedgwick Museum of Earth Sciences, dinosaur fossils – and other attractive-looking remains – do occasionally get sold at auction and also at mineral fairs. "The principle of selling fossils is established, and has been so ever since 'She sold sea shells on the sea shore', which derives from Mary Anning who sold fossils at Lyme Regis in the early 19th century."

The most expensive fossil ever sold was in 1997 when a 12.9 metre-long skeleton of Tyrannosaurus rex, the most complete ever found, wentwas sold. Named "Sue" after its discoverer, the palaeontologist Sue Hendrickson, the fossil fetched $7.6m (then about £4.7m) when it was sold to Chicago's Field Museum of Natural Historyin Chicago. A complete specimen of the 47m-year-old primate Darwinius, nicknamed "Ida", was bought for a reputed $1m by Jørn Hurum, a palaeontologist at Oslo's Natural History Museum.

Most fossils are not as expensive as these, however, and sell in for tens of thousands of dollars. As well as museums, Hollywood actors have been known to collect specimens.

While there was nothing wrong with compensating people for extracting fossils, said Norman, because it was an expensive and laborious process, he added a problem was that any fossil collector who found a bit of dinosaur may start to see dollar signs, which could be bad for science in the long run.

"Getting the balance right is what is needed. We must raise awareness of the uniqueness of such discoveries and reinforce the idea that these remains are part of our own global heritage (not just some local interest)," he said.