The real Billy Liar is discovered in Waterhouse papers

Unpublished autobiography written at 22 reveals the inspiration for the novel

Keith Waterhouse, author of Billy Liar, in later life (Tom Pilston)

His story of a young daydreamer stuck in a clerical job made Keith Waterhouse a household name. But Billy Liar was never thought to be about him, until now.

An unpublished autobiography, written when Waterhouse was 22, reveals that there were startling parallels between the exploits of the tale's central character and those of the writer.

In the novel, a teenager called William Fisher dreams of escaping the drudgery of his job in a funeral parlour and running away to be a scriptwriter in the city. He invents an imaginary world called Ambrosia, of which he is king.

In the manuscript "How to Live to be 22", which has been seen by The Independent on Sunday, we find that the young writer was also a fantasist, creating mythical kingdoms and dreaming of making life-changing decisions. "Taking a look at the Great Big World outside one gets, momentarily, stage fright," he writes in a line that could have come straight out of the novel.

Waterhouse, who died aged 80 in 2009, had always said readers shouldn't view his fictional writing as autobiographical. But curators at the British Library, which has been given the Waterhouse archive, are daring to do just that.

"It's always been evident that Waterhouse drew heavily on his northern upbringing in Billy Liar," says Zoe Wilcox, a curator at the library. "But what hasn't been obvious is the extent to which its protagonist mirrors the young Waterhouse."

The Waterhouse archive contains boxes packed with drafts of his novels and non-fiction, as well as correspondence, plays, sketches and screenplays. It is expected to take a year to catalogue.

Some of the material will be on display in the British Library's new exhibition, "Writing Britain: Wastelands to Wonderlands", which opens in May, and looks at how classic British writing has been influenced by the country's landscape.

Billy Liar was written in 1959, when Waterhouse was 30, and became a multi-award-winning film starring Tom Courtenay and Julie Christie. The book was turned into a play, a musical and a sitcom, and inspired various bands to write songs about the character, including The Smiths, Oasis and St Etienne.

While Billy Fisher's fantasy of leaving the North for London is dashed at the last minute, because he hops off the train to buy some milk, Waterhouse succeeded in his ambitions, joining Fleet Street to become a columnist on the Daily Mirror and then the Daily Mail. Billy Liar remains his most popular novel, but he also wrote several plays, including Jeffrey Bernard Is Unwell, and fought a lifelong campaign against the decline in standards of English. His book Waterhouse on Newspaper Style remains a journalist's handbook.

The newly unearthed autobiography reveals various prototypes for Ambrosia: one is an island community of boys and girls, which he rules wearing "a high hat with a bearskin"; another is a republic the size of Lancashire populated by young people and in which he is the president, the prime minister and, most tellingly, the editor of the newspaper.