The registration mark "S1" had been estimated to fetch between £200,000 and £250,000.

The plate was the first registration number to be issued in Edinburgh and it belonged to a leading pioneer of motoring.

Last night's sale marked the first time the registration number had come on the market since it was created in 1903.

Josephine Olley of auctioneer Bonhams, which handled the sale, said: "There was a bidding battle between several people on the telephone and a bidder in the room. The bidder who was present eventually secured the lot to a round of applause.

"We're obviously delighted to have broken the world record yet again."

The auction house, founded in 1793, has a track record of achieving high prices for registration numbers.

In 2005, the company sold registration "1F" for £144,500 and in 2006, it sold "M1" for a previous world record auction price of £331,500.

The bidder from the company Bold Registrations, who declined to be named, said of the sale: "I believe that number plates are a good investment even at this price. The registration number will be going on an old red Skoda (in] the Midlands."

The plate originally belonged to Sir John HA MacDonald, who was the Lord Justice Clerk of Scotland.