According to my sources among Waterstone's branch managers, there is nothing more annoying than the punter who approaches the sales desk with only the vaguest idea about the book they intend to buy. "It's about a chicken that gets murdered, and it's red" (this being, naturally, The Curious Incident of the Dog in the Night-Time). Or "The Chronicles of Nadia", requested the week that a Turkish transsexual of the same name won Channel 4's Big Brother. One hopes, for Tim Waterstone's sake, that readers searching for his latest novel in bookshops don't ask for something that "sounds like a book by Jeffrey Archer". Not least because Waterstone's writing is really rather good.

In for a Penny, in for a Pound sets the worlds of publishing and high finance on collision course. Hugh Emerson is struggling to ensure the survival of his publishing house. Rather than be legged over by a rival, he turns to his old friend Ned, scion of the Macaulay newspaper publishing empire, for financial help. Ned, in turn, is hoping to gain control of his father's ineptly managed basket of diversified com­panies and at the same time outwit Macaulay's self-serving advisers, Waring's.

In the second half of the book, one of Hugh's authors, Anna Lavey, a fabulously narcissistic and damaged agony aunt (pure fiction, obviously) is in danger of having long-buried secrets unearthed by an embittered stalker. When her own newspaper, part of the Macaulay stable, threatens to run the scoop, Anna warns Hugh to sort out the love triangle that is threatening to undermine his own marriage.

Additional frisson comes from the word on the street, which suggests that In for a Penny . . . is a cheeky roman à clef, drawn from Waterstone's portfolio career as a broker, board director, Labour Party donor and founder of the eponymous book retail chain. One can quite see, for example, why HarperCollins might have turned this novel down (or maybe the waspish aside about the people there is included because they did?).

But even if, like me, you fail to identify all the references to the various real-life entrepreneurs, publishers and politicos, it is certainly easy to imagine from Waterstone's skewering of the duplicitous Waring's that he must once have been shafted by the investment banking fraternity. Although other characters' deeds lead to worse disarray, certainly in emotional terms, Waterstone makes sure that there are enough mitigating circumstances in their back-stories to make their behaviour intelligible. Tellingly, however, Nicky Waring and his colleague James Emerson, Hugh's brother, are awarded no such redeeming features.

The financial acrobatics are breathtaking, and there are enough scenes where the men in red braces sit down over a bottle of "extremely good claret" to discuss the latest duplicity for investment banking ignoramuses like me to be able to keep up. The drama comes from the dynamics between characters. And it is no surprise, given Waterstone's capacity for reinvention, that his principal interest is in how people survive. He is indulgent of our tendency to self-delusion, and painfully good at describing emotional shock and its aftermath.

Waterstone attacks too many targets for this to be completely effective satire. But, as a portrait of a world driven by narcissism, the novel is, dare one say it, first among equals.

In for a Penny, in for a Pound
Tim Waterstone
Corvus, 368pp, £16.99

Lucy Beresford's first novel, "Something I'm Not", is published by Duckworth (£12.99)