Every day thousands of shoppers decide to buy a new book because Waterstone’s prominently displays or recommends it.

The reader may imagine that merit alone has inspired the country’s largest book chain to champion the volume now resting in their hands. The truth is a little less romantic.

In a confidential letter to publishers seen by The Times, Waterstone’s has set out what it expects them to pay if they want their books to be well promoted in its network of more than 300 stores this Christmas.

The most expensive package, available for only six books and designed to “maximise the potential of the biggest titles for Christmas”, costs £45,000 per title. The next category down offers prominent display spots at the front of each branch to about 45 new books for £25,000. Inclusion on the Paperbacks of the Year list costs up to £7,000 for each book, while an entry in Waterstone’s Gift Guide, with a book review, is a relative snip at £500.

To the despair of publishers, similar charges have become standard across the industry. The leading chains excuse them as a “contribution” towards marketing costs and recognition of a booksellers’ power to create bestsellers by heavily promoting select books.

At Borders, bookshop staff vote to decide the book of the month, while schools are polled to find the children’s book of the month. But the publishers still have to pay an undisclosed fee for the chosen book to be awarded the accolade.

A spokeswoman for W H Smith said: “Our premium promotion spaces are oversubscribed, which suggests that publishers feel they are getting value for money.”

Anthony Cheetham, the chairman of Quercus books, a small independent publisher, said: “It’s not a system you can opt out of. If Smith’s offer you one of these slots and you say no, their order doesn’t go down from 1,000 copies to 500 copies. It goes down to 20 copies.”

One of Quercus’s biggest successes is The Tenderness of Wolves by Stef Penney. It won the Costa Book of the Year award for 2006 but will not make the booksellers’ Christmas selections unless Quercus pays the going rate, Mr Cheetham said.

“The big chains will choose, say, 100 books of the year for Christmas but they will only put into their final selection the ones that are paid for.

“We are currently trying to decide whether we feel strong enough to say no and see what happens with that book if we don’t pay. It’s difficult, the only publisher who is in a strong position [to negotiate with booksellers on this] is Bloomsbury, the proud owners of H. Potter Esq.”

The imbalance is becoming more marked, with one supermarket proposing to start charging publishers just to pitch books at them.

“There is a genuine level of exasperation and anxiety in the publishing industry that the booksellers have gone too far down this road,” Mr Cheetham said. “It’s the reader who loses because it’s throttling the distribution of a wider range of high-quality books and [perpetuating] the system whereby you plaster the entire country with copies of the same few books.”

Neil Jewsbury, the commercial director of Waterstone’s, defended the charges and said that the quality of books chosen for books-of-the-year lists and other promotions was not compromised by money changing hands.

“Our expert booksellers, with years of experience, decide on what the best books of the last year are,” he said. “It’s only after that that we enter into a confidential commercial agreement with the publishers to decide how best to feature and promote these titles.”

But most customers are not aware of the practice. One leading figure in the publishing world said: “What the book stores are doing is what other trades do, whether it’s frocks or sun-cream. The problem and the difference here is that the customers don’t realise it. They think what they are seeing is a recommendation and have no idea that the retailer has taken good money from the publisher for it.”

At Waterstone’s flagship Piccadilly branch in Central London yesterday shoppers said they were appalled by the practice. Helen Brooks, 36, a television sales director and budding author, said: “It’s disgraceful, I certainly would not trust them or their lists. It doesn’t do a lot for home-grown talent, small publishers or writing independently.”

Peter Wheeler, 68, a pensioner, said: “It’s a con.”

What it costs

£45,000 For one book to appear in window and front-of-store displays, and in Waterstone’s national press and TV advertisement campaign

£25,000 To feature in a bay at front of store as a ‘gift book’ in its genre and be displayed at the till

£17,000 To be one of two titles promoted as the ‘offer of the week’ for one week in the run-up to Christmas

£7,000 To be displayed at front of store as a ‘paperback of the year’ and be mentioned in newspaper adverts.

£500 Price of an entry in Waterstone’s Christmas gift guide, complete with a bookseller review

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