An employee walks with Banksy's "Girl and Balloon" at Bonhams auction house in London in March 2012. File picture: Luke MacGregor/Reuters

London - The anonymous buyer of a Banksy painting that was partially shredded at an auction has agreed to proceed with her payment of 1.04 million pounds (1.37 million dollars) despite the damage to the artwork, the auctioneers said on Thursday.

"When the hammer came down last week and the work was shredded, I was at first shocked, but gradually I began to realize that I would end up with my own piece of art history," the auction house quoted the bidder as saying.

Sotheby's said the buyer of the 2006 work "Balloon Girl", identified only as "a female European collector and a long-standing client of Sotheby's", had decided to continue with the purchase at the original price.

Banksy said he had secretly built a shredder into the outsize gilt frame of the picture, activating it as the auction closed on October 5.

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Going, going, gone.

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The artwork has since been renamed "Love is in the Bin" and certificated by Pest Control, a company run by Banksy, who keeps his identity secret, London-based auctioneers Sotheby's said.

In this undated photo provided by Sotheby's the spray-painted canvas 'Girl with Balloon' by artist Banksy is pictured. Picture: Sotheby's/via AP

He posted a video of the shredding on his website, leading to speculation that he personally attended the auction.

Banksy’s painting Girl with Red Balloon was shredded after its sale at a Sotheby’s auction in London. Picture: Reuters

"Balloon Girl" came top in a 2017 poll of arts writers to find Britain's favourite artwork, Sotheby's said.