A DREAMY view by J. M. W. Turner of his beloved Venice yesterday became the most expensive British painting to be sold at auction.

Giudecca, La Donna della Salute and San Giorgio — sold for the first time at the Royal Academy for 250 guineas in 1841 — fetched $35,856,000 (£20.5 million) at Christie’s New York.

The sale broke the previous auction record for a British painting of just over $21 million, for The Lock by John Constable in 1990. It also far exceeded the Turner’s own record set by his Seascape, Folkstone, which was sold in London for £5.5 million in 1984.

The painting is now the second most expensive ever sold on the auction block, after Reubens’ Massacre of the Innocents, which fetched $75 million in 2002.

“It’s a bona fide masterpiece painted by the greatest of all British painters,” Nicholas Hall, Christie’s director of paintings, said. “It’s just an indication that the art market is on fire. This was the right painting at the right time.”

The sale became a battle of wills between two anonymous private collectors bidding on the telephone. For a time, they outbid each other in $500,000 increments, but then began testing each other with increases of $1 million.

The unnamed buyer was described as a private collector, and was believed to be an American.

Although Christie’s had raised the estimate from $15 million to $20 million because of the intense interest, the price rose so rapidly that many potential buyers never entered the fray.

“There were one or two others who were here and never got to raise their hands,” James Bruce-Gardyne, the auctioneer, said.

Robert Noortman, a Dutch dealer who dropped out in the low $20 million range, said: “It’s a great work of art. In the chain of art history, this is a very important part of the chain.

“It’s a masterpiece. I was hoping to buy it for the trade and would have to sell it again, so I stepped out.”

Turner, the son of a wigmaker, who became known as the Painter of Light, loved the ethereal quality of Venice, even though he only visited three times for a total of four weeks. His relationship with the floating city was the subject of a show at Tate Britain in 2003.

The artist painted Giudecca, La Donna della Salute and San Giorgio after his final trip to Venice in 1840 at the age of 65. It was one of three oil paintings he based on about 150 watercolours that he painted during the visit for the Royal Academy of Arts Exhibition of 1841.

The panorama, showing the city across the sea, was hailed by the Art Union as “a glorious example of colour, leaving, as usual, as much to the fancy of the spectator; and absolutely extorting applause”.

The painting, which measures 24in x 36in (61cm x 91cm), has been shown at the Royal Academy — where Turner studied when he was 15 — no fewer than four times. It was bought from the 1841 exhibition for 250 guineas by Elhanan Bicknell, one of the leading collectors of his day.

The work was sold at Christie’s in 1863 for 1,650 guineas to Sir Donald Currie, whose grandson sold it through Agnew’s in 1959 to William Wood Prince in 1959. The painting returned to Agnew’s in 1992 and was sold to a European private collector, who donated it to the St Francis of Assisi Foundation in New York.

Proceeds from the sale will fund the work of 6,000 missionaries from the Capuchin Order of Friars Minor in 86 countries.

Before it went on sale, Christie’s put the Turner on view in London, Palm Beach, Los Angeles and New York. It was even lent to one potential buyer to try out in his home overnight.

Mr Hall said that he was not surprised by the final price. “He is now an artist who is almost impossible to find on the market. There are very few in private hands.”