Author Allan Ahlberg, who delighted generations of children with colourful characters and nimble rhymes, has died aged 87.

Working with his wife Janet, an award-winning illustrator, Ahlberg produced a host of bestselling nursery classics including Burglar Bill, Peepo!, and Each Peach Pear Plum. After Janet’s death in 1994, he worked with illustrators such as Raymond Briggs and Bruce Ingman, with his career coming full circle in a series of collaborations with his daughter Jessica including Half a Pig and a pop-up set of anarchic variations on the tale of Goldilocks.

“He was enormously playful in spirit and language and had the ability to make you smile in one sentence,” said Belinda Ioni Rasmussen, CEO of Walker Books Group, which published some of his books. “Allan inspired generations of children’s writers, inspired all of us who worked with him, and inspired artists to make some of their very best work.”

Born in 1938, Ahlberg was adopted into a working-class family living in the West Midlands town of Oldbury. “My parents loved me and they did me a huge service saving me from growing up in a children’s home,” he told the Guardian in 2006, “but there were a fair few clips round the ear, no books and not much conversation.”

After grammar school and national service, Ahlberg worked as a postman, plumber’s mate and gravedigger. But his life took a different turn when the head of Oldbury’s parks and cemeteries heard he had A-levels, and decided Ahlberg should become a teacher. “I didn’t think it was such a good idea,” Ahlberg recalled in 2011. “I was very shy – I found it embarrassing to buy a bus ticket. But he got me to put my suit on and have a wash and a clean-up, and he took me to one or two schools, just to visit, just to get the feel of it.”

He fell in love with teaching, and fell in love again when he met Janet Hall while they were both studying at a teacher training college in Sunderland. After marrying in 1969 they settled near Leicester, Ahlberg teaching in a primary school while Janet worked as an illustrator. But when she despaired of the humdrum material she was drawing and asked Ahlberg to write her a story, he later recalled, “It was as if she turned a key in my back and I was off.”

After a string of rejections from publishers, the floodgates opened in 1976 with the vibrantly coloured The Old Joke Book. The following year saw the couple pivot into fiction with the story of a boy who stops growing and starts to shrink, The Vanishment of Thomas Tull, and Burglar Bill, who “lives in a tall house full of stolen property”, has “stolen fish and chips and a cup of stolen tea for supper” and then “swings a big stolen sack over his shoulder and goes off to work, stealing things”.

Their reputation was established in 1978 with a book for younger readers, Each Peach Pear Plum. A jaunty rhyme takes the reader on a daisy-chain game of I-spy offering glimpses of Tom Thumb up a peach tree, Cinderella dusting in the cellar, Baby Bunting falling from a tree and Jack and Jill disappearing down the hill. It was hailed as “a work of genius” by the critic Elaine Moss, with Janet’s illustrations earning her the prestigious Kate Greenaway medal the following year.

Ahlberg returned to his childhood in the West Midlands with Peepo!, a day in the life of a baby in a working-class family during the second world war. Cut-out circles offer a peek of “his father sleeping / In the big brass bed” and “his sisters searching / For a jar or tin / To take up to the park / And catch fishes in”. The secret was “all in the engineering”, Ahlberg told the Guardian. “You have to turn the page in order to see something – it’s a whole string of little suspenses, almost like in a theatre.”

Their daughter Jessica became an inspiration, with her appetite for flicking through catalogues inspiring The Baby’s Catalogue. Her love of playing with the post inspired The Jolly Postman, an intricately constructed story of deliveries to fairytale characters complete with envelopes containing letters and cards. It was five years in the making and went on to sell more than 6m copies.

Janet was 50 when she died of breast cancer in 1994, leaving Ahlberg and his 15-year-old daughter bereft. It was a book created in memory of his wife that lifted him out of despair, he later recalled: “Writing about something is distancing it … It distracted me for a whole year. And then I was on the road to recovery.”

The road led to a new publisher, where he met the editor Vanessa Clarke, who he later married, and collaborations with other illustrators. He teamed up with Bruce Ingman for The Runaway Dinner and The Pencil, and with Raymond Briggs for The Adventures of Bert. In 2004, Half a Pig marked the first joint project for Ahlberg and his daughter, with the pair going on to collaborate on titles including a memoir of his childhood, The Bucket, and a reworking of Goldilocks.

Meanwhile Ahlberg kept working, heading across the garden most days to write in his shed.

“I’m like a dripping tap,” he said in 2011. “As I get older I drip more slowly, but I still come down here. I’m less impatient to spend hour after hour writing, though I like it as much as ever.”