The leakage continues with contemporary work. The Kerlan Collection at the University of Minnesota contains the artwork and manuscripts of writers and illustrators such as Edward Ardizzone, Helen Cresswell, Penelope Lively and Jill Paton Walsh. The illustrator Brian Wildsmith has a museum devoted to his work in Japan.

But a decision has been taken this week which may stem the flow. Up to Pounds 27,000 of National Lottery cash has been awarded to investigate setting up a British Centre for the Children’s Book.

The centre, already a registered charity, is most likely to be in Newcastle-upon-Tyne. It will house manuscripts, roughs, preliminary drawings, finished illustrations and the correspondence of children’s authors and illustrators. There will also be a library of current publications, private collections of pre-war children’s books and magazines, reference works for children’s literature and its illustration, exhibitions, educational programmes, a bookshop “to serve as a model and disseminator of good bookselling” and among other facilities a cafe serving dishes associated with children’s books - Dr Seuss’s green eggs with ham or AA Milne’s Cottlestone pie.

The Centre for the Children’s Book is the idea of Elizabeth Hammill, the children’s bookseller for Waterstone’s in the city for the past 15 years. She has brought authors and illustrators to meet thousands of Tyneside young people through projects ranging from events at the bookshop to the Northern Children’s Book Festival and In brief ... a nationally-distributed critical review of teenage literature by teenagers.

She has been working on the latest project for the past five years. It has taken an outsider to realise the literary value of what we have been losing - Ms Hammill, a judge of the Smarties Book Prize, the new Whitbread award and other literary prizes, is a New Yorker.

“When attempts were being made to raise money for the Opie Collection (a collection of books associated with childhood now in the Bodleian) to be kept in this country I became acutely aware that material, part of our heritage of childhood, was leaving the country,” she said.

“To my horror David McKee [creator of Elmer the elephant] told me that he had thrown manuscripts away because he didn’t have the space to keep them and nobody seemed interested. Other countries value this archive material but we don’t seem to.”

Newcastle city council, the children’s publisher Walker Books, Northern Arts and the Arts Council have given initial funds. Key authors and illustrators have formed a committee with librarians, curators and educationists in the hope that the centre will become an invaluable national resource which will promote literacy.

Shirley Hughes, whose books of childhood and family life have delighted and absorbed generations of children and parents, is a committee member. She said: “We have here in England the pride of children’s literature. We are sought-after for our roughs of picture books and manuscripts. I am wooed all the time by places like the Kerlan Collection and others but I haven’t yet given stuff. All of this material is lying about in people’s houses with nowhere in Britain for it to go. The Centre for the Children’s Book would be a proper home.

“I illustrated other people’s books in the 50s and 60s, all in line. Now everything is in full colour. Use of line is on the demise in illustration. This could all be documented in a national archive.”

Shirley Hughes believed such a centre, based in a region where literacy is a major concern, would become the focus for literacy initiatives. She said: “To get children in there, to see what a book is all about and how it is processed, to see there are many different ways to tell a story, that would be captivating.”

She has offered to donate work if the project goes ahead, as have other authors and illustrators including Tony Ross, David McKee, Michael Foreman and this year’s Carnegie Medal winner Philip Pullman.

If the feasibility study is successful, the opening of the centre will be at least three years off and will need up to Pounds 10 million from fund raising and more National Lottery cash. It will be housed in a renovated city centre building or a purpose-built base on the quayside.

The executors of the estate of children’s author Robert Westall, who died last year, are keen to make a donation to the centre. Publishers, booksellers, private individuals and companies and Newcastle’s city fathers have also offered support.

Elizabeth Hammill is confident that the project will foster awareness of children’s literature, its historical and contemporary development, as well as becoming a national meeting place for authors, illustrators, children, students and researchers. She also hopes the centre will promote its own books of the year.

She said: “Many profound issues can be explored pictorially and shared with young children. Fairy-tales are relegated to pre-school reading these days and yet there is everything in a fairy-tale. These early books build up the language and the ideas. Children then feel confident to go on and find old friends in new places. Having a centre where the primacy of children’s books is celebrated will help change the public perception of children’s literature as the poor relation to adult work.”