The Jewel of Medina, a debut historical novel by Sherry Jones, a journalist who spent years studying Arab history, focuses on the life of A'isha, one of the prophet's wives to whome he is said to have become engaged when she was six.
It was due for release next week, but in May was pulled after the publisher was told the book could be seen as "offensive to some in the Muslim community". The Wall Street Journal reported that Denise Spellberg, associate professor of Islamic history at the University of Texas, who saw proofs of the book, declared it a "very ugly, stupid piece of work".
She urged the editor of a popular Muslim website to warn Muslims the forthcoming publication "made fun of Muslims and their history".
Word quickly spread across the internet, with bloggers dubbing the book "a new attempt to slander the Prophet of Islam." One editor at Random House told executives Ms Spellberg had warned her the book was a "declaration of war" that would be "far more controversial than The Satanic Verses and the Danish cartoons," the Wall Street Journal reported.
In 2006, cartoons in a Danish newspaper showing the Prophet Mohammed wearing a turban resembling a bomb triggered protests and rioting that left at least 50 people dead. Salman Rushdie's 1988 book The Satanic Verses was also condemned as offensive to Islam and the prophet, triggering violence and a fatwa from Iran's then supreme religious leader, Ayatollah Khomeini.
Thomas Perry, Random House's deputy publisher, said in a statement that after distributing galleys of the book, the company received "from credible and unrelated sources, cautionary advice not only that the publication of this book might be offensive to some in the Muslim community, but also that it could incite acts of violence by a small, radical segment."
He said the decision was taken "for the safety of the author, employees of Random House, booksellers and anyone else who would be involved in distribution and sale of the novel."
Ms Jones, who reportedly received $100,000 (£50,000) for a two-book deal, said she was "devastated" by the decision and saw her books as "bridge-builders to another culture".
"Although I've been aware from the start that my books might offend some people, I've never been afraid of physical harm because of them," she told the blog Bookroomreviews.com. "I wrote these books because I felt called to write them after researching A'isha for my own purposes. My passion for her story trumps the fear factor. I've expected controversy, yes, but never terrorism.