I don't know a great deal about publishing contracts, but I'd imagined that an advance was an advance of royalties. Blair's reported £4.6m, I'd imagine, is therefore made up of UK sales royalties, overseas sales royalties and UK and overseas serialisations. Mandy made £400k from his serialisation, so say a round £600k for Blair. As for the £4m, if he makes £20 a book (and this could be double the reality) he'd need to sell 200,000 copies for the publishers to break even. This, I'd imagine, is wildly optimistic. If the book only sells 30,000 copies, does he have to pay anything back? Maybe the publishers are happy to take their money in the long term, from future reprints and public lending rights payments, in regular dribbles.
As to what he's promised to give the RBL, this seems in doubt. The Mail's in no doubt this morning, saying "the former Prime Minister was trying to ‘ease his conscience’ by giving the £4.6million advance and any profits from his book to the Royal British Legion." but the Telegraph has a story that casts doubt on exactly what Blair has promised, and who gets the tax advantage.
There's the delicious possibility that Blair never intended to give his advance away, that what he meant was he'd keep the advance and the RBL could have anything earned by the book over and above this. Ambiguous phrasing and an August media starved of news meant the press had soon decided themselves what he meant - and that included the advance. If this is the case, it's too late to backtrack. The MSM should hang onto this story until Blair's donation becomes absolutely tangible.
As a footnote, there's nothing new in blood-soaked donkeys seeking reparation for their deeds; it was General Haig, perhaps the bloodiest butcher of the Western Front, who set up the Haig Fund in 1921.