Monroe dress goes for a song at $1.267m

Marilyn Monroe's form-fitting, flesh-coloured dress, a sequined gown that she wore in 1962 at President John F

Marilyn Monroe's form-fitting, flesh-coloured dress, a sequined gown that she wore in 1962 at President John F. Kennedy's birthday celebration, has sold for a record $1,267,500 (£950,000).

The dress, worn by Monroe during her breathless Happy Birthday, Mr President serenade, was the highest-priced item last night during the first session of a two-day auction in New York.

The gown was bought by Manhattan-based Gotta Have It! Collectibles. Asked why he paid so much for it, the company's co-owner, Mr Robert Schargin, said: "Because it wasn't three million dollars, which we thought it was worth. We stole it."

Buyers snapped up everything from Marilyn Monroe's blue jeans and bikini bottoms to screenplays and sweaters, most at prices far beyond the predictions of the auction house, Christie's.

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The hammer price for the dress was $1.15 million; the final sale price includes commission. Made of silk souffle gauze and covered with 6,000 rhinestone beads and sequins, the Jean Louis dress originally cost $12,000.

The bidding culminated in a wild 2 1/2-minute showdown for the dress that Monroe wore stunningly at the May 19th, 1962, birthday celebration at Madison Square Garden, New York.

Marilyn Monroe died in 1962, aged 36, from an overdose of sleeping pills.

The crowd cheered loudly when the winning bid was announced. It set a record for an auctioned dress, eclipsing the £170,000 paid for an ink-blue gown worn by Diana, Princess of Wales, and sold in 1997.

Another Monroe dress, a full-length black sequined evening dress, believed to have been worn to entertain US soldiers in Korea in 1954, sold for $112,000.

A picture of Monroe autographed by an assortment of her Hollywood co-stars, including Groucho Marx, Jimmy Stewart, Lauren Bacall and Humphrey Bogart, sold for $88,300.

The major item, a platinum eternity ring, encrusted with 34 baguette-cut diamonds, given to Marilyn Monroe by her ex-husband Joe DiMaggio, sold for $772,500. The pre-sale estimate was $30,000-$50,000.

Bidding far outpaced what experts at Christie's had predicted. A baby grand piano, once owned by Marilyn Monroe's mother and reacquired by the actress years later, sold for $632,500; its pre-sale estimate was $10,000-$15,000. Even a plaster floor lamp (estimated at $2,000-$4,000) sold for $21,850.

The auctioned items, most of them in storage for nearly four decades, included 400 books from her private library, and mementos from her marriages to Joe DiMaggio, the former New York Yankees star, and the playwright Arthur Miller.

Marilyn Monroe left all her belongings to her acting coach, Mr Lee Strasberg. His widow, Anna, was selling them off, with some proceeds going to charity. Sales of Monroe's books will benefit the Literacy Partners, a New York adult and family literacy project, while her fur collection will benefit the World Wildlife Foundation.