I am a Nick Drake fan (if you're not listen to Day is Done, Pink Moon or Fruit Tree) but I knew the conflicting rumors about the guitar before getting stuck on the M20. By the way I found the following correspondence online regarding the Bryter Layter album cover between a fan and the album's photographer (spoiler alert: turns out neither the guitar, chair, nor shoes belonged to Nick).
Nigel Waymouth is the photographer of the cover photo of Nick on Bryter Layter. The following are copies of email correspondence between Marsha Zemekis and Nigel Waymouth in regards to the cover photo.
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4 June 2002
Hello Mr. Waymouth,
In the photograph of the album cover of Nick Drake's "Bryter Layter", why were his shoes off? Did that have a meaning?
Thank you for your time,
Marsha
4 June 2002
Marsha,
They weren't his shoes, they were mine. After I had asked him to take off his shoes, I put them there to add an optimistic note (blue suede shoes - dancing shoes), in an otherwise somber photograph, that would echo the title of the album, Bryter Layter. A few years later Nick came up to me at a party and said how much he liked the cover and that he now understood what it was about. The chair, by the way, once belonged to Charles Dickens, who sat in it to write, and the small Guild guitar was one that Eric Clapton gave to his friend and flat mate, Martin Sharp, the australian artist and chief designer of Oz magazine. Oh, and the shoes were made to my design by the Chelsea Cobbler. Hope that covers it! Nigel Waymouth