It is a small bookshop that inspired Sarah Waters to create her best-selling lesbian bodice rippers, which acted as a “lifeline” to the would-be novelist Patrick Gale, and the only place that Jake Arnott and Simon Callow rely on for research for their books.

But now Gay’s The Word, Britain’s only lesbian and gay bookshop, is fighting closure in the wake of rising rents and a dramatic fall in sales, and its celebrity customers are at the forefront of a campaign to save it.

Custom at the shop, which opened in 1979 in Bloomsbury, Central London, was badly affected by the 7/7 bombings — the bus bombing and one of the Tube explosions happened around nearby Russell Square.

The effects of book-buying online and the rise of the bookstore chains have also put the shop in peril, said manager Jim MacSweeney. Gay’s The Word needs to raise £20,000 within two months to stay in business and is looking for well-heeled donors or investors - and new customers.

“It’s a case of use us or lose us. We are on the verge of closing. It’s tough trading for all independents,” MacSweeney said. “People came to us when we were the only shop selling gay literature. But times have changed.”

Sarah Waters, the Man Booker-nominated author of The Night Watch, said: “I could never have produced fiction of my own if Gay's the Word had not been there first, supplying me with other gay writers’ books. It was not just a bookshop, but the hub and affirmation of a whole community. As a young lesbian new to London I remember arranging to meet people there; drinking coffee there, finding accommodation through its noticeboard.”

The shop, which was founded by bookseller Ernest Hole, sells a range of gay-themed fiction and non-fiction from around the world, and is one of the most enduring symbols of gay life in London. But it has suffered from not being located in the gay centre of the capital, Soho.

In 1984, Customs officials raided the shop during the infamous Operation Tiger. Among the books seized were works by Gore Vidal, Allen Ginsberg, Christopher Isherwood and Tennessee Williams. “Customs thought gay bookshop meant sex shop, dirty macs,” says MacSweeney. “Not what we were about.”

Charges relating to the importation of indecent and obscene material were dropped after a high-profile campaign by civil liberties groups and questions in the House of Commons.

Today, the only homophobia the shop suffers is “a brick through the window once a year and twice a week people spit on the windows,” MacSweeney said.

Store managers are considering whether to turn the bookshop into a charity or community interest company — part private company, part charity. Should it be saved, it may relocate to Soho. “At the moment, lots of gay men, especially younger ones, simply don’t know we’re here,” said MacSweeney.

Famous customers include Man Booker prize winner Alan Hollinghurst, presenter Sandi Toskvig and artists Gilbert and George.

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