Some say there is nothing so good as the crisp smell of new books. But these days, it seems, many of us find the musty fusty smell of old books even better.

Oxfam, which opened its first bookshop 22 years ago in Oxford’s St Giles, has become the third largest bookseller in the country, and Europe’s biggest High Street retailer of secondhand books.

Collectors of used books are a growing band; I can vouch for this as someone who has been collecting Oxford World Classics, published by Oxford University Press, for nearly ten years, and has seen their prices all but double.

Oxfam’s first national book festival, Bookfest, in July, resulted in a 40 per cent rise in book donations and an increase of sales of more than ten per cent.

The charity’s list of the most donated and top-selling secondhand books features the usual suspects. The top five most donated authors to Oxfam are Dan Brown, John Grisham, Ian Rankin, Danielle Steel, and Helen Fielding. The top sellers are Ian Rankin, Dan Brown, Bernard Cornwell, Stephanie Meyer and Terry Pratchett.

It seems that many fiction addicts buy books at Oxfam, read them, and then donate them back to the shop for the next reader. But Oxfam’s ability to profit from the trend, by selling books through its 700 shops, is a causing ripples of anxiety in the book trade. The Provincial Booksellers Fairs Association (PBFA), founded to give country booksellers a shop window in London by organising book fairs there, complained that Oxfam is forcing independent sellers out of business. Its chairman is to meet Oxfam’s director of trading, David McCullough, to discuss the situation.

Ann Gate, owner of Waterfields secondhand bookshop in Oxford High Street, said Oxfam’s activities had nothing to do with her decision to close her shop, but added: “I think that they [Oxfam] are well-meaning, but they are amateurs. And many people give books to Oxfam without realising exactly what they are giving. We, on the other hand, work with owners of books and value their property for them. Then of course there is the old complaint that charity shops do not pay the full business rates, as we have to do.”

She added: “Most of the books sold at the St Giles Street Oxfam shop do not compete with ours, but some at the Turl Street shop do: for example old Penguins, which are much collected now.”

The manager of the Turl Street shop, David Sorrell, said: “Among our volunteers there are many ex-book trade people who know a great deal. Each shop also sources its own books and so adapts to the particular kind of customer in a particular area. For example, we have a lot of bookish academics coming in here.”

Oxfam’s Mr McCullough robustly defended the Oxford charity’s success in the book world. He said: “I am not convinced by the argument that we are destroying the individuality of High Streets and constitute unfair competition. Tesco takes one pound in every eight spent by consumers and I think that it and the likes of Amazon are a far greater threat.

“As for the idea that people sometimes give valuable books that they would not have given had they known their true worth, this is now changing with our Gift Aid scheme. Under the scheme, taxpayers giving books are assigned a bar code and must be told exactly what has happened to their donation, how much it raised, and, crucially, whether they are happy for Oxfam to have the proceeds. In effect, we become their agents.”

He added that despite the administrative hassle, Gift Aid was still worthwhile for the charity, which sells £1.6m worth of books a month — or enough to buy 50,000 emergency shelters, safe water for 2.1 million people, or 64,000 goats.

The average price of an Oxfam book is £1.60. Mr McCullough said that when he went into a shop, say at an airport, he hurried out again when he saw the prices charged.

On the business rates issue, he said: “It’s a comparatively small advantage. We pay commercial rent on an average shop, say £50,000, and utilities of say £5,000. The reduction in rates is a very small amount proportionately and shows the Government recognition of the volunteer element of charities.”

But isn’t selling secondhand books a little like file sharing on the Internet. in that the producer (author, publisher. etc.) does not gain from the sale?

“No, it is not,” said Mr McCullough, stoutly, “because the producer has already been paid once for that copy. When someone file-shares, that is not the case.”

And of course many authors are extremely happy to help Oxfam raise money through books, even though they receive nothing from secondhand sales.

Oxford author Phillip Pullman lent his support to Bookfest. He said: “As someone who’s shopped at Oxfam bookshops and supported Oxfam’s work for years, I was delighted to hear about Bookfest, which is a brilliant idea.”

And novelist Joanna Trollope said: “It is such a good way to buy books, which are, after all, for sharing. Why would we writers write them, after all, if it weren’t to communicate?”

Mr McCullough added: “We have sold everything from the first Sherlock Holmes story to the latest Harry Potter. But in the end, we want people to see the impact that buying a book from Oxfam can have on the lives of poor people around the world.”

And what are the biggest coups that have come Oxfam’s way?

The most it has raised from a single book is £18,000, twice over — once from a 17th-century economic treatise and again for a rare first edition of a Graham Greene book. Then there was that Sherlock Holmes story, A Study in Scarlet, in a Victorian annual, which a volunteer spotted and which raised £15,500.

As for those pocket-size Oxford World Classics that I collect for reading in my old age, I just hope my eyesight will still be good enough to read them when the time comes.