An oil painting by a Scottish art teacher, which was sold by Holocaust victim Anne Frank's aunt for just £60 less than 50 years ago, has fetched £181,250 at an auction, setting a new world record for a work by the artist.

The picture, Tiddley Winks, is by William Somerville Shanks, who was born in Gourock, Inverclyde, on September 28, 1864, and was a drawing and painting teacher at Glasgow School of Art for 29 years.

Auctioneers Sotheby's said: "Tiddley Winks is undoubtedly Shanks's masterpiece. It shows two children playing the game in a comfortably furnished interior and displays the bravura brushwork and rich colouring associated with the Scottish school of painters in the 1890s and early years of the 20th century."

The painting was sold for £60 in 1962 by art dealer Charlotte Frank, an aunt of Anne Frank, to Sir David Montagu Douglas Scott, a grandson of the fifth Duke of Buccleuch.

Sir David died at the age of 99 in 1986 and his art collection was inherited by his widow, Lady Scott. After her death in 2006, the collection, comprising 212 paintings, was put up for sale.

It sold for more than £4.6m at Sotheby's in London on Wednesday and the Shanks painting was the fifth-most valuable work in the sale.

William Somerville Shanks, the son of Paisley clothier and tailor John Shanks, started as a pattern maker for a curtain manufacturer and attended evening classes at Glasgow School of Art. He died on July 28, 1951.

Until the latest auction, the world record for a Shanks painting was £16,800, the sum paid at Christie's in London on March 13, 2005, for an oil painting titled Irises in a Vase With Flowers and a Book to the Side.

The late Sir David Scott was particularly fond of Shanks's Tiddley Winks painting, once remarking: "I don't think I've ever seen another painting by Somerville Shanks, but if this is typical of his work I wonder why he is not better known. For it is really beautifully painted.

"The dress of the girl in the foreground is reminiscent of (John Singer) Sargent at his best and, of course, the whole picture is delightfully nostalgic, absolutely redolent as it were of a day nursery in the 1880s or 1890s."

George Woods, assistant curator of the McLean Museum and Art Gallery in Greenock, which owns six pictures by Shanks, said: "As far as I'm aware, William Somerville Shanks is the best-known Gourock painter and his best work is of good quality, obviously aware of the Glasgow Boys and the Colourists yet remaining independent of both."