The 18th or early 19th century pencil work sold for £30,000, against a pre-sale estimate of £4,000.
The sale could be more evidence of a growing appreciation among collectors and high-net worth individuals for the English painter, more commonly known for his portraits. Previously, Romney's depiction of Mrs Anne Carwardine sold for £408,800 at a Sotheby's auction in 2003.
King Lear, Edgar and the fool was one of 10 pieces brought to the auction by Bolton Council, which is looking to fund a new storage facility for its art by selling off some of its more valuable pieces.
As expected, the biggest seller among the council's lots was George Everett Millais's The Somnambulist, which achieved £74,400, comfortably beating its low end estimate of £70,000.
The council's 10 pieces sold for a combined £170,000, and also included Edward Burne-Jones's A Study of Danae and the Brazen Tower, which tripled its estimate with a strong £15,600 showing.
A council spokesman told local paper the Bolton News: "It's been an eventful sale, with some surprises and some disappointments, but overall we are pleased with the outcome.
"The next sale is in August and we will be monitoring the progress of all the sales with interest."
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