They include some of the biggest literary names on the planet, among them Stephen King, Donna Tartt, Paul Auster, James Patterson and John Grisham; a Pulitzer prize winner in Jennifer Egan; and four from this year's Man Booker longlist, Joshua Ferris, Karen Joy Fowler, Siri Hustvedt and Joseph O'Neill. Then there are first-time writers, historians, biographers – all of them part of an unprecedented campaign against the world's biggest books retailer, Amazon.

The writers have lent their name to a letter objecting to Amazon's tactics as it negotiates over ebooks with Hachette, the fourth largest publisher in the US.

As the standoff continues, Amazon has been slowing down delivery of Hachette books, preventing pre-order and removing previous discounts.

It is "thuggish behaviour", said the Maine-based thriller writer Douglas Preston. "I'm talking to so many young authors, struggling debut authors who have worked for years and years to get published and then Amazon does this and crushes their hopes and dreams of building an audience."

Earlier this week Preston had nearly 900 names - also including Jeffery Deaver , Lee Child, Barbara Kingsolver, Clive Cussler, Anita Shreve and Philip Pullman – backing a letter that he intends to publish, full page, in the New York Times.

"I have never seen in my entire life authors coming together like this," he said. "Ever. For any reason.

"Amazon has been throwing its weight around for quite some time in a bullying fashion and I think authors are fed up. We feel betrayed because we helped Amazon become one of the largest corporations in the world. We supported it from the beginning, we contributed free blogs, reviews and all kinds of stuff that Amazon asked us to do for nothing.

"We thought we had a fairly good partnership but i n the last half dozen years Amazon's corporate behaviour has not supported authors at all."

He said Amazon was treating authors as "cannon fodder" and it had to stop.

"We're not against Amazon as a company – we would like to see it sell books, be profitable and successful. What we object to is harming authors who have nothing to do with this dispute to gain leverage."

Outside Amazon and Hachette, no one fully knows what the dispute is about. But it is understood to be a battle over ebook revenue with Amazon thought to want 50% from every ebook instead of 30%.

The stakes are high. In the UK the Publishers Association released figures this week showing a 10% rise in digital sales to £132.5m between January and April, compared with the same period in 2013. Those sales have grown 305% over the past five years and are showing little sign of slowing.

The dispute is all in the US but everyone in publishing fears it will have ramifications across the industry.

Philip Jones, editor of the Bookseller, said: "Everybody I speak to thinks this negotiation is pivotal to what happens next. We won't know what the terms are when they eventually settle at but I think there will be a line drawn in the sand – a line we all have to live with."

It is not the first time this sort of dispute has happened.

"The difference here is that Amazon is so big, so dominant that it has a much wider and chilling effect," said Jones. "Particularly on the ebook market where if you are not being sold or actively promoted on Amazon you really are dead in the water."

He too had never known writers so angry. "That's the thing that's different this time – we've seen writers take sides which is remarkable and deeply worrying for Amazon. Becoming widely known as book author-unfriendly is not a great place for Amazon to be."

Amazon has tried to win round the authors who, in one statement, it labelled as Hachette's "human shields". Earlier this month it proposed giving authors 100% of royalties while the impasse continued – a move rebuffed by Hachette.

The company says it is fighting for better prices for its customers. In a recent interview with the Wall Street Journal Russ Grandinetti, senior vice-president of Kindle content, said: "This discussion is all about ebook pricing. The terms under which we trade will determine how good the prices are that we can offer customers."

Amazon has also had support from self-publishing authors. Hugh Howey, something of a poster boy for self-publishing, was one of those behind a petition on Change.org supporting Amazon for creating a level playing field and characterising Hachette as the bad guys. Under the title 'Stop fighting low prices and fair wages' it had, on Thursday, 7,367 signatures.

Amazon, launched by Jeff Bezos 20 years ago, is a difficult company not to use. It is also an easy company to dislike – the Guardian revealed in 2012 Amazon had paid almost no UK corporation tax despite recording £7bn sales.

The British historian Amanda Foreman is one writer who has signed the letter even though she is not published by Hachette.

"It is not for me a purely economic question in the way that some critics have said: 'It's just Hachette authors.'"

She believes there is a bigger danger with Amazon controlling both supply and demand. "They become a single pipeline for ideas … you simply cannot allow that to happen and the danger is so terrifically present."

She believes Amazon needs to be reined in. "It is a company that has managed to grow at the expense of companies that play by the rules. It doesn't have to pay its taxes or go through any of the common practices that we demand of bricks and mortar companies. It sells its books as loss leaders in order to support nappies and batteries. An entire industry is being held hostage in Amazon's pursuit of a wider market share."

Few people can see the Hachette-Amazon dispute being resolved soon. Preston has talked about developing a longer-term strategy, although what that might be is another question.

He insists however that the writers are prepared for a long haul. "Honestly we are hoping Jeff Bezos will come to his senses and settle this problem with Hachette without hurting authors. Let these two corporations juke it out … just don't hurt us. If he does we can all go to writing books but if Jeff wants to take the long hard road with us, we will walk that road with him."

A spokeswoman for Amazon made reference to statements Preston has made during the dispute.

She said: "Mr Preston says: 'We have many loyal and committed readers. They listen when we speak. That represents power.' He is completely missing the point. It's not readers who should be listening to Mr Preston, but Mr Preston who should be listening to readers. And they have clearly expressed a preference for e-books priced less than $10.

"Even four years ago when readers expressed such a preference, Mr Preston responded by saying publicly, 'The sense of entitlement of the American consumer is absolutely astonishing'. It's pretty clear it's Mr Preston who feels entitled. And what's 'astonishing' is that he thinks readers won't recognise an opportunist who seeks readers' support while actively working against their interests."

• This article was updated on 26 July 2014 to edit a garbled quote at the end of the text.