It wasn't enough for Sandy Lerner to experience Jane Austen's world through books, so she used ?10 million of her own cash to recreate it for scholars and the public to visit. Anne Sebba reports.

The scene in Pride and Prejudice in which Lady Catherine de Bourgh drives to Elizabeth Bennet's house to implore her not to marry Mr Darcy is the dramatic climax of Jane Austen's novel. The level of Lady Catherine's determination to stop the love match is appreciated more fully when we know the cost of her journey, with post horses, in the 18th century. It was the equivalent today of renting a private Learjet.

US businesswoman and Austen devotee Sandy Lerner has spent ten years and ?10 million on a quest to ensure that future generations of Austen lovers will better understand the scale of Lady Catherine's gesture and the way women lived in the time such novels were written. "My mission is context," Lerner says, sitting in the resplendent grounds of Chawton House, Hampshire, the newly restored Elizabethan manor that once belonged to Austen's brother.

Next week, Chawton House opens as the Library and Centre for the Study of Early English Women's Writing from 1600-1830, thanks to Lerner's philanthropy and passion for Austen's work. There is nothing else like it in the country. Lerner's magnificent collection of 9,000 rare volumes and manuscripts, lovingly built up over the past 20 years, will be available for study in rooms where the Austen family once lived and played. One of the gems is a recently rediscovered play in manuscript written by Austen when she was about 20, probably intended as family entertainment. But there is much more to the collection than just literary works.

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"It's the context and the routine of women's lives that produced these wonderful, magical novels," Lerner explains. "We have the books but not the environment that produced them, and we know astonishingly little about that environment. If these were books about farming or medicine, context wouldn't be so relevant. But they are about the interplay of people in a domestic context and getting along with people in the same small space with not a lot of privacy."

Lerner, 48, admits that some of her aspirations for restoring the "gentleness" of an 18th-century landscape were spoiled by the 21st-century necessity for arrival by car up the long gravel path. "Of course, this isn't a complete time capsule," she says. "I would have loved to have given scholars a place to come and read and write where they could live as people lived at the time, with candles and chamber pots. Knowing just a few of these things can change our understanding of the literature quite profoundly." The oak-beamed house does boast some fine period furniture and handsome contemporary oil paintings, but the two invigilated reading rooms, as well as the more informal reading rooms for reference material, will have not only state-of-the-art temperature control but internet access, too.

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Lerner, who was brought up on a cattle ranch in California, made her fortune co-founding the computer company Cisco Systems in 1984. Eleven years later, she found further success with Urban Decay, a "grunge" makeup company. She now breeds shire horses at home in Virginia and is deeply involved in numerous animal welfare and environmental organisations. At Chawton, there are already two shire horses, intended to give carriage rides around the estate, and dozens of sheep graze in the fields on either side of the drive. There are plans for other rare breeds to be brought back and to recreate an 18th-century farm in the grounds.

In 1992, Lerner discovered that Chawton House and its 5-year-old estate were for sale after a bid for a leisure centre with two golf courses on the site had failed. She immediately decided to buy, and her vision for the study centre has not faltered since. It was good timing because she and her husband, Leonard Bosack, had begun to sell their Cisco stock as soon as the company went public. This released millions of dollars to fund ventures they cared about.

Although Austen herself never lived in Chawton House, she often visited and knew it well. She lived with her widowed mother and sister in a nearby cottage (now the Jane Austen Museum) given to her by her brother Edward Austen Knight when he inherited the estate from the heirless Knight family.

By the time Richard Knight came into the property in 1988, it urgently needed millions spending on it.

Lerner swiftly established a charitable foundation to restore the house, gardens and parkland. She put up most of the money herself, and she has received no UK funding, despite asking various grant-giving bodies. The walled garden, designed by Edward Austen Knight on the advice of his sisters Jane and Cassandra, is being recreated to provide not only flowers but organically grown fruit, vegetables and herbs, some of which will be used in contemporary recipes to be prepared in the kitchens. The church where Jane's mother and sister are buried sits halfway up the drive.

Lerner's love of Austen dates back to 1982, when she was engaged in a graduate programme in mathematics at Stanford University. "It was debilitating, and there was a television film of Pride and Prejudice over six weeks," she recalls. "My life came to a complete stop. I read everything Jane Austen had written, and I cried when I came to the end because there wasn't anything else to read. Some people chain smoke, some take to strong drink. I got all whacked out on Jane Austen. It was a way to decompress and recreate all of my energy and enthusiasm by going backward and forward two centuries." She estimates that she has read Persuasion at least 70 times now.

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Totally hooked, Lerner went on to found a branch of the Jane Austen Society of North America and then realised how much more there was to know; that Austen did not write in a vacuum but was part of a tradition. She started meeting feminist academics, including Isobel Grundy, now a Chawton Trustee, who told her there were perhaps 2,000 or 3,000 "ladies who wrote" and 10,000 to 15,000 works to be collected. But the survival rate is low as many books were discarded from libraries, considered of no importance, and others, traditionally put into circulating libraries, have fallen apart. A woman clearly fired by the chase, Lerner was not discouraged and started scouting around. She says she and her team still hope to find one book every six months "if we're lucky".

Although the Austen manuscript - a 20-minute pastiche of Samuel Richardson's novel Sir Charles Grandison - is a treasured part of the collection, those running the study centre are at pains to point out that they are neither a shrine to Austen nor in competition with the Jane Austen museum.

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Librarian Helen Scott observes: "One of the most interesting aspects of this collection is that it is not just literature - poetry and novels - but also contains much contextual material from the period such as cookery books, 17th-century guides to midwifery, conduct manuals from the 18th century with advice to women on how to behave." Among her prize possessions, now in the purpose-built environmentally controlled storerooms, is a leather-bound London Almanack of 1807, a mere two inches by one and a half, from which can be discovered the correct rates to pay a hackney coachman.

"The term literature in literary studies is a much more capacious word these days," adds Jennie Batchelor, Chawton's first fellow in women's writing. "Ephemera is a hot topic in cultural history and literary criticism generally."

Batchelor has been seconded to Chawton from Southampton University. Strong links are being established between the two institutions: the library and university are jointly sponsoring the opening three-day conference, which begins next Wednesday and is expected to attract more than 200 scholars from all over the world. Furthermore, Chawton is funding a three-year postdoctoral fellowship with Southampton, and Batchelor, whose specialty is 18th-century dress and fashion, has designed a new MA unit related to the Chawton collection.

Then there are the novels themselves. "Many people who are not scholars of the period are often surprised by how many women writers there were then," Batchelor says. "Maria Edgeworth and Frances Burney are just two of the better known." But it is too early to say if any of the material will herald a rediscovery of a hitherto unknown writer. There is one handwritten anonymous novel, bound in leather, waiting to be read. "Tantalising," Batchelor says. "But meanwhile anything we can bring to the texture of the literary landscape is absolutely vital."

Jane Alderson, Chawton's chief executive, is at pains to point out that anyone can visit the library, by appointment, without professing to a particular scholarly interest in one author. "We don't want to be an exclusive academic community nor a museum piece," she says. "Because we want to attract people from across the board to come here, we've initiated lectures and seminars by contemporary writers, such as Ruth Rendell, so that people understand that contemporary women writers owe a debt to those who went before. We're a living library." There are also plans for a Regency Ball and dinner in the autumn when the Jane Austen dancers will perform.

Even as Chawton comes to life, Lerner has decided not to play an active role in its running. Now that the library is open, she says she will simply bow out. "I just hope they still let me read the books," she adds.

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Anne Sebba is writing The Memory Collector William Bankes: Exile and the Making of an English Country House, due for publication in 2004.