Confusion reigned in the book trade this week after the collapse of the 100-year-old Net Book Agreement.

The decision by publishers and high street booksellers to pull out of the NBA has meant the price of bestselling and Booker Prize titles being slashed dramatically. Alan Leitch, marketing director of Blackwell's bookshops in Oxford, said that "the main battle lines will be drawn across the bestseller lists" but added that textbooks may soon be targeted for "incentive promotion".

The small profit margin on academic books - as little as 3 per cent after overheads - means that price discounting is unlikely on textbooks or scholarly monographs. But Mr Leitch said students may be encouraged with such deals as "buy three textbooks and get a free pad" or reductions for those who choose "a core book and a background book".

Alan Giles, managing director of Waterstone's, said the textbook battle was "possible rather than probable" but warned that its share of the academic market - worth about ?28 million annually - would be "defended vigorously". Although academic books represent only about 25 per cent of Waterstone's trade, compared with 80 per cent of Blackwell's business, they are important because they are read by people who also read leisure books, the biggest part of Waterstone's trade.

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Mr Giles said: "A disproportionate number of our customers are either going through or have been through the tertiary education system, so having a good relationship with those people is very important."

But if students find better deals on textbooks, scholarly monographs could become more expensive. Mr Leitch said: "The danger is that scholarly monographs will rise in price as booksellers and publishers seek to recoup the profits lost on bestseller titles." Mark Wait, managing director of Heffer's bookshop in Cambridge, added that the more research oriented and esoteric publications might not get published.

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For the moment, booksellers are not reducing prices of their academic books, although Mr Wait revealed that "contingency plans have been made". The academic publishers are also pursuing a policy of "wait and see". Ivan Asquith, managing director of Oxford University Press's arts and reference division, said: "Nobody wants to be left behind, but nobody wants to sell a book at a lower price either."