Royalties from Andrew Lloyd Webber's Cats, the long-running musical inspired by T.S. Eliot's verse, have enabled the poet's estate to donate £2.5 million to the London Library.

For 13 years, the Nobel prize-winning poet presided over the world's largest independent lending library, which was founded in 1841 and whose former presidents and vice-presidents include Tennyson and Kipling. Such was Eliot's passion for the institution that he once declared: “I am convinced that if this library disappeared, it would be a disaster to the world of letters, and would leave a vacancy that no other form of library could fill.”

Last night the library's current president, the Oscar-winning playwright Sir Tom Stoppard, joined 150 eminent figures from the arts for a ceremony at which Eliot's 82-year-old widow, Valerie, formally handed over £2.5 million towards an ambitious £25 million redevelopment of its premises.

The money will fund a new wing that will be named T.S.Eliot House in honour of a writer whose Four Quartets of 1943 led to his recognition as the greatest poet of his day. It was his 1939 classic, The Old Possum's Book Of Practical Cats, that inspired the musical.

Mrs Eliot's gift marks the single largest donation to a library that receives no government or statutory grants, despite the quality of its collection - with books dating from the 16th century onwards - that has inspired generations of writers.

The library has long since outgrown its premises at the northwest corner of St James's Square, Central London, even though its existing shelving stretches for about 15 miles. With 8,000 new volumes each year, it requires an additional half mile of shelving every three years. The redevelopment will offer enough extra shelving to accommodate the collections for the next 25 years.

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