The Hambleden heir, his divorce, and why a change of mind has preserved a rural idyll

For Keith Bird it was the best news since the men in dark suits had started arriving unannounced on his doorstep carrying glossy property brochures featuring the small flint-knapped cottage in Hambleden that has been his home for the past 77 years.

The visits began two months ago when Henry Smith, heir to the WH Smith newsagents fortune and squire of the Buckinghamshire village, had put its 44 cottages and 1,600 acres of surrounding wooded farmland on the market for £16.5m.

His decision threatened the end of a charmed existence for Mr Bird and the other villagers of Hambleden. Mr Smith has used his semi-feudal rights of patronage to maintain rents vastly below current market rates and helped preserve the village as the ultimate rural idyll for cinematographers seeking a slice of ale-supping and cap-doffing England.

Yesterday he conceded that an estate that had been owned by his family for 132 years and where he had been resident landlord for more than a decade was no longer on the market. FPD Savills, the upmarket estate agents brought in to co-ordinate the sale, confirmed that it had been asked to withdraw the "vast majority" of the properties after their owner's change of heart.

Mr Bird, 77, a retired farm worker on the Hambleden estate, who has lived in his tied cottage opposite the village church since he was two weeks old, was suitably delighted as he sat on a garden bench watching a procession of daytrippers lured by the images which have been seen on screens across the globe.

He said: "I didn't really understand why Henry wanted to sell it in the first place but it's a relief. Most people are sitting tenants so we couldn't have been forced to leave but it was worrying.

"For weeks we've had groups of people knocking on the door to come in and have a poke around. They were all very polite but they had brochures with our houses in them and there wasn't anything we could do about it."

Mr Smith denied that the reason for putting Hambleden up for sale was his impending divorce from his American wife, Sally, who he met in California while he was flirting with a career in the film industry. They both still live - separately - in the village.

Either way, the sale would have ended a century-long association between the denizens of the Buckinghamshire estate, first brought into existence in the 11th century, and the descendants of W H Smith, the Victorian MP whose entrepreneurial talent for selling reading matter at railway stations enabled him in 1841 to buy one of England's best shooting estates and take the name Viscount Hambleden.

The third Viscount, William Henry Smith, set about building new housing after the First World War to encourage families to stay in the village. In 1944 he also entered into a covenant with the National Trust to preserve the appearance of the buildings. Hence the reason the butcher's shop and bakery in Hambleden continue to display their respective signs despite having long since been converted into family homes.

The same benevolent but conservative stewardship has continued with members of the Smith dynasty continuing to live in the village to this day, including one of Henry Smith's brothers and his Italian mother, Maria, who occupies Hambleden Manor, a handsome redbrick pile in the centre of the village.

About three-quarters of the homes in Hambleden come under the ownership of Mr Smith along with the village shop, the Stag and Huntsman pub and a renowned pheasant shoot where the likes of the Duke of York and Lord Lichfield bag up to 400 birds on each of the estate's 16 shooting days.

The result is a meticulously preserved corner of the Chilterns so redolent of a bygone era that some leases stipulate the right to hang out washing on common land or run an allotment. At least one resident passed by in a vintage Jaguar yesterday while Mr Smith can be often found pulling pints in the pub on Saturday nights.

So it comes as little surprise that Hambleden has so far been the setting for 15 feature films and television series from Chitty Chitty Bang Bang and 101 Dalmatians to Band of Brothers, Midsomer Murders and the recent dramatisation of Daniel Deronda.

The sense of living in a different age also extends to the village's financial life, chiefly the rent charged for the tied houses and businesses. The average annual rate is about £3,000, with five houses occupied rent-free. The market rate would be about £20,000. Some 30 of the 44 homes are also governed by the 1977 Rent Act, which gives the tenants the right of residence until death and means their rent cannot be increased without local authority approval.

It is an anachronistic existence which villagers are fully prepared to recognise is the result of Mr Smith's stewardship. He bought the estate 15 years ago from his father, the 4th Viscount of Hambleden, whose own father in turn had set up the newsagents chain.

Ben Allen, treasurer of the parochial church council, said: "We are very happy with what we have here because Hambleden has held back the times. There are several elements of it preserved in aspic."

Property dealers pointed out that the seemingly mouthwatering offer of a whole English village for those in the market for such a thing (briefly rumoured to include Victoria and David Beckham) was not as lucrative as it might seem.

The restrictive agreements governing the village, including a 1940s covenant to the National Trust, mean income from rentals is barely £25,000 a year and new property development would be all but impossible.

Nonetheless, FPD Savills insisted that there had been several offers to buy the estate as a whole, or in one of several lots, which included the village houses (£7m), the pub (£850,000), or the shop and tea rooms (£650,000). A spokesman said: "There was a lot of interest but a decision has been taken by our client to remove a majority of the properties from sale."

A small number of properties, possibly including the pub and shop, will still be sold.

Mr Smith was yesterday saying nothing about the reasons for his volte-face, although he spoke, before the proposed sale, of running the estate on a more commercial basis if he did not get the price he was seeking for it. He said then: "I suppose it's a wake-up call. If I don't get what I want for it, I'll just have to go in and do all the things I don't like doing but most businessmen wouldn't think twice about doing."

None of which troubled Sid Gregory, 83, a former postmaster who has lived in Hambleden since 1942.

Casting his eye over the line of gleaming Range Rovers and BMWs parked outside the church, he said: "It used to be farm labourers and estate workers. Now it's a different class of person here. It's already a different Hambleden but I'll never leave."