First, a stereotype. The author of children's books wears Laura Ashley prints, makes her own marmalade on the Aga and drives a Volvo, which transports her from one frightfully interesting project to the next. Writing her charming little stories fills in the spare hour between meeting the WI ladies for lunch and picking up the kids from school.

Now another stereotype: the unemployed single mother lives with her toddler in a bedsit because that is all she can afford on benefit. Though she would dearly love to find a job, the cost of a nursery place would wipe out any extra income she earned. She thinks she will go mad if something does not change soon.

Joanne Rowling is both a children's author and a single mother, and until recently her life was more bedsit than country kitchen. But something has changed: her first book has just been published. The word from the British book trade on Harry Potter and the Philosopher's Stone is extremely positive and Scholastic, the American publishing house, has just bought the rights for a sum Rowling admits is north of $100,000 (some sources say it could be as high as $500,000). This is a handsome advance for any first novel but unheard of for a children's author. The Aga and Volvo are now within her grasp.

For Rowling, 31, it has been a seven-year slog writing the book during which time she married and separated from a Portuguese television journalist, gave birth, and coped with the death of her mother. "I felt before the book was published that it saved my sanity, it truly did," she says. "I came back from Portugal to no job and no place to live. I wrote furiously while my daughter was sleeping, which not only gave me something to do with my brain but was an escape for me, too. Corny as it sounds, if the book had never been published it would still have been a hugely important part of my life because it gave me some place to go other than a grotty flat in which I felt trapped."

Rowling was brought up in the Forest of Dean on the Welsh border, but after returning to Britain three years ago she came to Edinburgh where her sister and grandmother lived. For the first six months she was caught in the benefit trap that makes it difficult for single mothers to find work. When her daughter Jessica (now almost four) was old enough, Rowling enrolled at teacher-training college and for the past year has been a supply French teacher at Leith Academy. She completed her first story when she was six, and has two unfinished tomes of "very bad" grown-up fiction tucked away in a drawer.

"I never expected to make money," she says. "I always saw Harry Potter as this quirky little book. I liked it and I worked hard at it, but never in my wildest dreams did I imagine large advances." What will the money mean to her? "In practical terms it will mean security. We've been getting along but it has been hand-to-mouth on occasions. I don't want to dramatise it - we weren't starving or anything, but single parents are never going to get rich. It's amazing to think something you have done is worth that amount of money to someone else, but then I look at my daughter and think, thank God for it."

Although Rowling had been writing for years, she hit creative payday with the character called Harry Potter. He is an orphan who has been brought up by his unpleasant aunt and uncle in an anonymous Home Counties suburb. Their own son is spoilt rotten, requiring two bedrooms to house all his toys, while Harry sleeps in a cupboard under the stairs. But Harry has some strange powers which nobody understands until he discovers he is a wizard.

In an age of Nintendo and Teletubbies (of which Jessica is a fan), Harry Potter and the Philosopher's Stone reads like a children's book written 20 years ago. Aimed at the 9-13 age group, it is essentially a boarding school novel, a setting which has become unfashionable. "It had to be a boarding school to sustain the fantasy," Rowling says. "He had to go somewhere that's an enclosed world to have his adventures. Kids are incredibly powerless because everything is determined for them, so a rich fantasy life in which they do have power is almost inevitable. And a middle-class boarding school is a world where they are free of their parents. Being an orphan is very liberating in a book. I think it's a common fantasy of children that somehow these parents aren't their parents."

If the process of writing the book offered an escape from her surroundings, Rowling later realised the book had been influenced by the death of her own mother. Rowling wrote a chapter in which Harry Potter sees his parents in a magic mirror after their death. "People have said it is quite a dark chapter, and I don't think it would have been there if I hadn't lost my mother while I was writing the book," says Rowling. "I would give almost anything for another five minutes with my mother which, of course, would never be enough."

With the second Harry Potter book due to be delivered to her publisher this month, Rowling has tried to write herself a happy ending. Perhaps the good times will make the sad memories easier to bear.