POWER & INFLUENCE IN THE ARTS: BOOKS / Contesting the cover charge: Where once bookselling was a gentlemanly pursuit, it's now an industry and Frances Coady is its acceptable face. By Sabine Durrant

You'll find the publisher of Jonathan Cape, Chatto & Windus, Vintage and Pimlico in London restaurants, being lunched by agents. You'll find her in bookshops, converting the booksellers, and in sales conferences, schmoozing with reps. You'll find her in editorial meetings, and design meetings, and financial meetings, and next week you'll find her in meetings in New York. But sometimes, if you're lucky, you'll find her on the floor.

'I remember walking into her office,' says Rachael Kerr, who used to be publicity director at Cape and is now head of marketing and publicity at Picador, 'and she'd be on her hands and knees, pages all around her and she'd be going through them all, meticulously. The thing about Frances is she may have become increasingly important, but she's never stopped being an on-the-page, line-by-line editor. She'll always be hands on.'

Publishing has altered a great deal over recent years. It used to be a nice gentlemanly outfit that kept its hands clean; no scrabbling about on the floor, no poking its fingers into things - like selling and marketing and bookshops, for goodness sake - that had nothing to do with the art of creation. But then a realisation seeped in and marked those lovely pages, the realisation that manufacturing books, like manufacturing records or cars, was an industry. Gradually it became clear: it's not enough to love books, you have to sell them too. The face of publishing has changed beyond recognition and now it looks like Frances Coady.

At Random House (the conglomerate that embraces a hefty handful of publishing companies), Coady is technically number three, though it doesn't really seem that way. Gail Rebuck, the chief executive, has limited time for the editorial side of things ('She tends mainly to be tied up with figures, bless her,' says one employee), whereas Coady makes sure she's involved in every aspect - the editing, the designing (it's said that she approves every jacket) and the selling. 'I don't just love books,' she says, 'I'm fascinated by the whole process.' Waterstone's, that Goliath of the new publishing ethos, is said to adore her. And it's an uncomfortable fact that when an agent or an author is uneasy about the way a book is being handled, in any corner of Random, it's usually Coady they take out to lunch.

And then there's Vintage, the B- format literary paperback imprint Coady founded in 1989, whose stunning success launched a thousand embarrassing moments in editorial conferences throughout Britain. Her conviction that paperbacks were not just packages, that the progression from 'hard' to 'soft' should be thought of as 'horizontal' not 'vertical' led to beautifully designed, fiercely marketed volumes (in the first year she went to two or three trade events a week). 'Paperbacks are more and more important - they're the way books are going in the future, where the life of the book is,' says the literary agent Gillon Aitken, who has just sold Salman Rushdie's new book to Coady. 'And Frances understands that with great clarity. She's a publisher of the moment.'

Coady is proud of the Vintage list, on which Edward Said rubs shoulders with A S Byatt, Jeanette Winterson with John Pilger. Her detractors are sniffier: style above content they smile politely. But even her style has had its effect. Book-buyers noticed these books, proving to Coady that good writing can sell in mass market quantities, that 'commercial' and 'literary' are not contradictions, that design works. (Book-buyers are aesthetically conscious about all aspects of their lives, she maintains: 'You buy some loo paper and at the end of the day you pick the one you like the look of. So with books.')

Since then, Flamingo has relaunched and Picador brought in a new designer. 'Publishers are always looking at each other, copying, picking up ideas,' says Liz Calder, publishing director at Bloomsbury. 'And Vintage made people think, 'What aren't we doing? What should we be doing? What are they doing right?' '

COADY isn't on the floor, but bending over the sofa, frantically tidying up, when I meet her at her office. She's immediately engaging, hands flying through her short dark hair, silver bracelets jangling, gruff voice punctuated by an easy laugh. The writer Sebastian Faulks, whose novel Birdsong is one of Vintage's major books this summer, notes how her disarming manner guides her through the potential pitfalls of her position: 'It's a difficult job,' he says, 'all those people underneath her, many talented and opinionated in their own way, some older than her (she was born in 1958). But she seems to get them to do what she wants. She has great charm, and people also respect her judgement.'

He also remarks how, when editing, she 'cuts through the undergrowth' (the writer John Pilger too comments on 'the clarity of her mind'), but in conversation this is hedged in by a certain theatricality. Coady, who talks non-stop, also shakes her head, winces or laughs at her own opinions and language as if to temper her convictions for your sake, to flatter you with her own insecurity while drumming her point home. If she's not the most powerful person in publishing, she's almost certainly the most charming.

This self-consciousness may be due in part to the structure of her career. Her first job was in sales at Faber & Faber - 'a very sobering place to start' - where she grew used to editors being described as 'idiots': 'When I became an editor I would present at sales conferences and I'd be thinking, 'So you think I'm an idiot huh?' ' Later, she segued into editorial, where (aside from a three-year stint working in Music and Arts at the BBC) she has stayed ever since. But she has never lost the wisdom of that early perspective: 'You go into bookshops with reps and you realise they don't stand talking about the book; they flash the book- jacket in front of the bookseller, they hold up their fingers and they say 'One? Two? Three?' That's what it's about. It can't be mad that people promote and market everything else in the world - what is inherent to books that people think they will sell without anybody doing anything?'

Much of what Coady has done in her field is to do with breaking rules, with merging the boundaries between marketing and publishing, between fiction and non-fiction (Roger Penrose's The Emperor's New Mind, her first non-fiction title looks like a novel), with refusing to let the design of her books lodge into rigid grids. John Pilger also believes that she's one of the few publishers who is prepared to 'break what seems to be an embargo on adventurous dissenting non-fiction'. He says that she 'always encourages you to strengthen a book, never to dilute it'.

And this, for all her commercial nous and Messianic zeal, may in the end be where Coady's power as a publisher lies. She says (with an embarrassed laugh) that she's 'a book junkie' and colleagues describe her again and again as a publisher 'who puts authors first'. It's with the words on the paper it seems that her heart lies.

'I go home with a manuscript sometimes,' she says, 'and I sit there with it - the new novel by Antonia Byatt or Marina Warner - and it's the most intense privileged sensation. I think, 'I'm one of the very first people who's going to read this book.' That's what excites me most about this job.'

(Photographs omitted)