Orson Welles's Oscar for writing Citizen Kane sold at auction in Los Angeles for $861,542 US on Tuesday.

The online auction held by Los Angeles auction house Nate D. Saunders received bids from around the world for the 1942 trophy, a reflection of the hot market for Hollywood memorabilia. A New York Christie's auction of Elizabeth Taylor's jewelry and gowns closed last weekend after raising more than $150 million.

"This is a testament to the popularity of Orson Welles and his magnum opus Citizen Kane," auction house owner Saunders said in a statement.

Officials had set a reserve price of between $600,000 and $1 million US for Welles' Academy Award, which had previously failed to sell at auction in 2007.

The auction house received bids from around the world for Welles' Oscar. (Associated Press )

The American Film Institute named Citizen Kane its top film of the 20th century and the drama was nominated for nine Academy Awards, including best picture, in 1942. However, it eventually won only best screenplay for Welles, in association with Herman J. Mankiewicz (How Green Was My Valley took the best picture honours).

As well as writing and directing the feature, Welles portrayed the ruthless newspaper baron in the film.

He was neglected by the academy for the next 30 years, until he earned an honorary award "for superlative artistry and versatility in the creation of motion pictures."

The Citizen Kane statuette has had a chequered history. It was thought to be lost after Welles died in 1985, but resurfaced in 1994 when a cinematographer attempted to sell it, saying the filmmaker had given it to him as a form of payment.

Welles' daughter Beatrice filed a lawsuit and won ownership of the Oscar, but when she tried to sell it in 2003 was sued by the Academy of Motion Picture Arts and Sciences herself. The organization cited a rule, enacted in 1950, that it must be given first rights to acquire any Oscar hardware put up for sale.

That legal battle resulted in a 2004 court ruling that cleared the way for subsequent sales of the golden statuette. Welles' daughter quietly sold it to California nonprofit company the Dax Foundation, which in turn was unsuccessful in selling it at auction in 2007.

Though the academy was successful in blocking the sale of two early Oscars belonging to Mary Pickford, several other pre-1950s trophies have also been sold at auction. For instance, in 1999, singer Michael Jackson paid $1.5 million to acquire the best picture Oscar awarded to the 1939 film Gone with the Wind.