Asda sparked a Harry Potter price war last night by charging just £5 per copy for J.K. Rowling's final tale. The supermarket had earlier put a maximum £8.87 retail price on Harry Potter And The Deathly Hallows - the same as rival chains Tesco and Sainsbury's.

But Asda's allocation of 500,000 copies will be priced at £5 per book when it is launched tonight. Asda stores will limit sales of the £5 books to just two per person to prevent bulk-buying. Customers who have already placed orders with the chain will be charged the same price.

Spokesman Ed Watson said: "Kids trust Asda as the place to get a copy of the Deathly Hallows at a great price and that's exactly what we'll be giving them. "Harry Potter has reignited children's passion for reading and our colleagues and customers are gearing up for the biggest book launch we've ever seen." Asda's announcement will prompt other retailers to slash their prices.

The supermarket was forced to apologise to Bloomsbury earlier this week after it criticised the publisher's recommended retail price of £17.99 for the seventh and final Harry Potter instalment. Waterstone's and Woolworths have set their prices at £8.99 per copy while WH Smith will charge £10.99.

Philip Wicks, spokesman for the Booksellers Association's small business forum, said Asda would be selling the last Harry Potter book at a loss. "The going rate before Asda came in at £5 was a 50% discount. " Independent booksellers can't even buy it from their wholesalers at 50% discount," he said. "We think it's a crying shame that the supermarkets have decided to treat it as a loss-leader, like a can of baked beans. "But we are going to continue to give our loyal customers the best experience we can."

Mr Wicks said his two North Yorkshire bookshops would be selling the final Harry Potter instalment for £14.99. Stores throughout Britain were gearing up for Harry Potter mania yesterday as the first fans began queuing to get their hands on the book. Hundreds of outlets will open before midnight for the book's launch, among them Woolworths, Sainsbury's, Asda, Tesco and WH Smith. The retailers are each laying on a string of Potter-themed events includingfancy-dress competitions, face-painting and midnight countdowns.

Waterstone's in London, gave away 800 free tickets to a podcast event at its Piccadilly branch which were snapped up by fans worldwide. It expects up to 2,000 people to join the queue outside the store. A cluster of mainly foreign fans started queueing outside the bookstore yesterday. The line was headed up by a group of Dutch youngsters. And right at the front was 20-year-old Roy Oosting. He said: "I am so excited and thrilled to be the first in the queue for this magical evening.

"I came to the Waterstone's event for the last Harry Potter launch and it had such an amazing atmosphere we had to come back. "We met so many great people last time from all over the world and this event is going to be even better." Wayne Winstone from the children's books team at Waterstone's said: "Our midnight opening at Piccadilly is a fantastic chance for die-hard fans to be the first to get their hands on the new book and promises to be an amazing night."

Thayne Forbes, joint managing director of brand valuation consultancy Intangible Business, said the Harry Potter brand could be worth between £2.4billion and £4.8billion globally.

"It is a unique phenomenon and looks set to surpass the existing most valuable character brands in the world - Mickey Mouse and Winnie the Pooh."