The sale of a Downing Street visitors’ book from Margaret Thatcher and Sir John Major’s time in office has been postponed amid a dispute about its ownership.

The red leather book contains the signatures of famous visitors including royals and world leaders such as former US president Ronald Reagan and Diana, Princess of Wales.

It was put up for sale by a former civil servant who says he found it among water-damaged boxes in a Whitehall basement more than 20 years ago, according to the auctioneer which was proposing to sell it.

But the sale has been put on hold temporarily after the Cabinet Office claimed it was Government property, under the Public Records Act 1958, and demanded it be removed from sale immediately.

West London-based Chiswick Auctions still intends to sell the book once ownership has been established and claimed their client contacted Number 10 twice, in 2017 and 2020, to offer to return the book, but did not receive a response.

The item was described by the auctioneer as a “unique and historic visitors’ book” with “a gilt-tooled front panel” and “gilt lettering”.

According to the auction house, the seller – who wants to remain anonymous – used to work at Downing Street and found the book after he was given “permission and approval” to remove water-damaged boxes marked for incineration following a flood at 70 Whitehall.

It was not until 2017, when the man was preparing to move house, that he looked inside the boxes and, “to his amazement”, found the book packaged in tissue paper and bubble wrap.

Chiswick Auctions originally estimated the book would sell for between £10,000 to £15,000, but said it has “every reason to believe” the eventual sale price might be higher following an increase in interest since the sale was postponed.

The late Queen and Duke of Edinburgh signed the book during their visit marking the 250th anniversary of 10 Downing Street in December 1985.

Other famous signatories include George HW Bush, the Princess Royal, Prince Abdullah of Saudi Arabia, former prime ministers James Callaghan and Harold Wilson, and the heads of government who attended the G7 Summit in July 1991.

The seller has asked the Cabinet Office for information, including the file reference number, classification and retention schedule, which would “prove that the Visitors’ Book is actually a public record”, said the auction house.

So far, these details have not yet been provided, it said.

Head of autographs and memorabilia Valentina Borghi, who works at the auction house, said: “Having twice had no response from Number 10, due to ill health and the cost-of-living crisis, my client has taken the very difficult decision to put the book up for auction in the hope of being able to meet some of those unaffordable expenses.”

A Downing Street source said: “We will be taking steps to recover this Crown property. The book is a piece of history – it belongs to the nation, not to an individual to be sold.”

It is understood that Number 10 believes it has no record of the individual getting in contact in 2017 or 2020.