Death of the Strong Wicked Man – one of the 19 rediscovered Blake watercolours. The folio is at $1m-1.5m.

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Sotheby's expect the folio of 19 illustrations for Robert Blair's poem The Grave - the most important offering of works by the artist ever to appear at auction - to bring $12m-17.5m on May 2.

The imminent sale is the latest twist in a saga that began in 1808 when Blake was paid £21 by publisher Robert Cromek for a group of 40 illustrations - a dozen of which were engraved and helped spread the artist's fame in the early 19th century. The illustrations were sold by Cromek's dependants at an Edinburgh auction in 1836 and for the next 164 years Blake scholars were unaware of their whereabouts. Then, in the spring of 2001, while browsing through a secondhand bookshop, Caledonia Books, on Glasgow's Great Western Road, two Yorkshire book dealers, Paul Williams and Jeffery Bates, spotted a red morocco slipcase titled in gilt Designs for Blair's Grave, containing 19 superbly preserved watercolours in their original mounts.

The dealers acquired the folio and consigned it to Swindon book auctioneer Dominic Winter, but before an auction scheduled for June 2002, Caledonia Books served a High Court writ on the two Yorkshire dealers, suing for the return of the illustrations and costs of more than £15,000. The case also attracted the attention of the estate that had originally sold the folio to Caledonia Books, and they joined the proceedings.

An out-of-court settlement was reached before February 2003 when it was announced that London art dealer Libbie Howie had negotiated the sale to "an anonymous collector" for an estimated £4.9m. This was the sum Agnew's had advised the Tate Gallery to pay for the illustrations.

Ms Howie, while not being drawn on the nationality of her client, had told ATG: "He is a man who understands the importance of these watercolours to scholars. Their loan to a museum has not been ruled out."

In fact, it has recently emerged the purchaser was thought to be an investment fund that recently applied for an export licence to sell the folio overseas. A temporary export ban ran out in September with no party coming forward with a serious intention to raise the £8.8m the investors were prepared to accept from a British buyer.

Experts have criticised the splitting up of a unique set that together illuminates a well-known Gothic musing on death and redemption.

"In an ideal world they are the sort of thing that should be kept in this country," David Barrie, director of the Art Fund, Britain's largest private charity funding the arts, told ATG last week. "The really heartbreaking thing is to see them go to New York and probably be broken up and scattered among numerous private collections." An interview with David Barrie will appear in next week's issue.

• The folio of engravings will go on display at Sotheby's in New Bond Street from March 9-15.