Prince William and Prince Harry were offered the chance to buy James' Hewitt's letters written by their mother.
The former cavalry officer had a high-profile affair with Princess Diana, who died in 1997, and James has recently been accused of trying to sell correspondence from the princess and William, written almost 30 years ago.
His Los Angeles-based dealer Gary Zimet revealed he first offered to sell the letters to the princes, via their lawyers Harbottle & Lewis, before putting them on the market.
He told the Mail on Sunday: "I thought it was the decent thing to do. It was easy to find out who their lawyer is from the internet, so I wrote to Mr Tyrrell and attached scans of the letters and cards and wrote, 'Kindly advise if William and Harry would be interested in acquiring these letters and cards which I am selling on behalf of James Hewitt.'"
Meanwhile, James' friend Alan Darlow has claimed he had no plans to sell the letters but just wanted to put Mr Zimet off and quoted a large sum in order to "discourage him".
He told The Times: "[James] had made it quite clear he did not wish to sell. He therefore gave him a high figure to discourage him."
However, James admitted to trying to sell the letters 10 years ago, saying: "I was offered £10 million and was interested to see if that was bona fide and it turned out not to be."
Mr Zimet said he initially approached Hewitt about selling the letters, who agreed and asked him to be discreet.
He said: "I am ultra aggressive about going after material. About 18 months ago I wrote a letter to 'James Hewitt, Devon' and it got to him.
"I was told privacy was paramount because Hewitt was worried about the fall-out if it became public. He needs money, pure and simple."