In 1991, the recession was hitting various corners of the publishing world savagely. A particular victim was Wordsworth Editions which then published hardback reprints of exotic full-colour “fine editions”. One Monday morning, its owner, Michael Trayler, and his editorial director, Marcus Clapham, were flying back from Canada when they came up with the idea of Pounds 1 reprints of classic novels.

By Friday they had a working list of 12 titles. They consulted printers and within 10 days had their first year’s publishing programme mapped. Wordsworth Classics were launched in June that year with 50,000 print runs for each title and, as Clapham says, “Everyone was waiting for us to fall flat on our face.”

Everyone in the book business, that is. But Clapham remembers Tim Waterstone (then owner of the Waterstone’s chain) being told he would get only a quarter of the profit he might expect on a traditional paperback and replying, “I’ll stock them if they sell four times as fast.” The public took to them with equal enthusiasm, their interest in the classics re-awakening thanks to television dramatisations. Readers were delighted to get a hefty Austen or Bront novel for just Pounds 1 (poets weigh in at Pounds 2).

But the series’ success went beyond the high street. As education budgets fell, schools and colleges became interested. Stuart Widd of Kesgrave High School near Ipswich is probably typical of many heads of English who said: “For Pounds 1, you can have your own copy and write all over it.”

Ray Rumsby, adviser for English in Norfolk, thinks they may have had more impact on children’s individual reading than on formal literature courses. “Departments have tended to use them to stock up book boxes - and they’re popular at school book fairs.”

No wonder that Wordsworth soon began a companion Children’s Classics series, offering titles by writers such as Haggard, Kipling, Nesbit and Twain. That is, by authors who have been dead for 70 years - and who don’t qualify for royalties.

For the only way to market books at Pounds 1 is to have minimal overheads. Wordsworth operate out of a tiny editorial office tucked away up a tatty staircase in Paddington, west London. Their total staff consists of 12 (four are part-timers) and their first titles were, in effect, photocopies of non-copyright Victorian or Edwardian editions reprinted on cheap paper.

Ray Rumsby admits that they have “an authentic look” but worries the quality of the typeface and density of the print may be off-putting. Stuart Widd would also like a clearer text but says: “For Pounds 1, what can you expect?” Others have been critical about the editorial matter - and it must be said that the unannotated bibliographies are perfunctory.

But since August 1993, all new Wordsworth Classics have been re-set with more legible typefaces. This may have been due not only to public demand but to the belated appearance of a rival in the marketplace.

Penguin Books (who started publishing Penguin Classics 50 years ago, now known as the black Classics because of their distinctive covers) launched Penguin Popular Classics in 1994 - priced Pounds 1. For their part, Wordsworth “thank God Penguin didn’t get round to it any earlier”. For Penguin, Alastair Rolfe, publishing director of the Penguin Press and responsible for classics, admits: “Penguin took the view at the outset that it wasn’t going to be the revolution it turned out to be. We didn’t foresee the way the trade would take up the Wordsworth cause.”

But while Marcus Clapham and his chief editor Clive Reynard may have - in Alastair Rolfe’s words - “entirely disrupted the publishing of classic texts”, this may not be totally good news. Rolfe adds: “The books create the expectation that prices have been, up to now, too high.” He would say that, you might think. Except Penguin keeps some 800 titles in print in its black Classic range and aims constantly to “refresh” their extensive and respected critical apparatus. This works only while the slower selling titles are subsidised by the more popular: “It’s essential to make a margin on the really lucrative side of the business.”

Even so, the prices of some 50 black Classics, aimed at a more “aspirational” readership than the “Populars”, have been reduced from around Pounds 4. 99 to Pounds 1.99 or Pounds 2.50 - a route being followed by the other key player in the field, the Oxford World’s Classics. And last year Penguin further excited the book world with 60p pocket-sized books issued to mark the firm’s 60th birthday.

The first 60 of these booklets were followed by 60 mini-classics (extracted from full-length works), and then by similar sets of Puffins, cookery, biography and travel books. Another publisher, Phoenix, followed suit and soon there were 250 such titles. At first they were feted as one of the great innovations of publishing and for bringing massive numbers of purchasers through bookshop doors. Realists in the trade pointed out that, even if a punter bought eight or nine, the shop still made less than the profit on one conventional paperback.

There were other critics. Professor and poet Andrew Motion was one who cursed “the drift to sound-bitery” and saw them as symptomatic of “the Classic FM culture”.

But it is basically the trade that has seen them off - because of low profits and because they were not on “sale or return”. Penguin have aborted plans for further series and the Bloomsbury Quids (see box) may be the last of the genre.

So will Wordsworth’s Pounds 1 Classics go the same way? The company is still expanding, buying up the rights to slightly out-of-date reference books (such as the 1990 Cassell Dictionary of Biology and a less-than-legible reprint of a 1989 Harrap English-French one) and marketing them at Pounds 2; they’ve just sold 20,000 copies of a Cassell English-Spanish dictionary in Chile. This autumn sees the launch of Wordsworth Classics of World Literature (retailing at Pounds 2 each) with titles by Aristotle, John Stuart Mill and Sir Thomas Malory. The latter’s Morte D’Arthur, albeit in a 1900 text, is attractively printed and remarkable value for its 850 pages.

Wordsworth are beginning to imitate Penguin’s long-established marketing operation to schools with a new education catalogue and are offering 20 per cent discounts.

The company has committed itself to the Pounds 1 Classics “until the end of 1997”. Since I visited Penguin, they have announced they will publish two new Popular Classics a month throughout next year.

Even so, Alastair Rolfe still cherishes his more upmarket series. “We’re here for the long haul. We want to win teenagers and students to the black Classics approach and stay with us for life.” Meanwhile, as one Open University lecturer confronted by the realities of student life admits: “A Wordsworth will do.”

The Wordsworth education catalogue is available from Wordsworth Editions, Cumberland House, Crib Street, Ware, Herts SG12 9ET; Penguin’s dedicated School Line is on 0181 899 4025.