New £15,000 prize aims to restore the glory of the short story

Today, with the announcement at the Edinburgh International Book Festival of the world's largest award for a short story, plans are afoot to put it back at the heart of the modern literary landscape.

In an attempt to rejuvenate the literary form, organisers of the National Short Story Prize are offering £15,000 to the winner and £3,000 for the runner-up in what they hope will become an annual event of the size and prominence of the Man Booker Prize.

Funded by the National Endowment for Science, Technology and the Arts (Nesta) and supported by BBC Radio 4 and Prospect magazine, the award aims to re-establish the importance of the short story after many years of neglect. It is open to authors in the United Kingdom with a previous record of publication.

A little more than 20 years ago children were entertained by Jackanory and their parents by Roald Dahl's Tales of the Unexpected. There was a blossoming market in short stories as numerous magazines, especially women's, devoted pages and pages to fictional tales.

But by the early Nineties short stories became unfashionable as they were wiped from the magazines and replaced with true-life tales and celebrity gossip.

The publishing phenomenon of the short story, which grew to prominence with Victorian periodicals such as the fiction-packed Strand magazine, which sold more than 300,000 copies when it launched in January 1891, came to an end in Britain.

Although still a popular genre in the US and elsewhere, the organisers of the new prize feel that too much emphasis is placed on the novel as the only way for an author to make a name.

"The novel is a capacious old whore: everyone has a go at her, but she rarely emits so much as a groan for their efforts," said Alex Linklater, deputy editor of Prospect. "The short story, on the other hand, is a nimble goddess: she selects her suitors fastidiously and sings like a dove when they succeed.

"The British literary bordello is heaving with flabby novels; it's time to give back some love to the story."

It is hoped the award will attract fledgling and establish writers. Entries are limited to stories of no more than 8,000 words, written in English. Only two will be accepted per author.

Any story entered must either be unpublished or if published then the first and only publication must have been between 1 January and 31 December this year.

Entries will be considered by a panel of judges, including William Boyd, the Scottish novelist; Francine Stock, the broadcaster and writer; Alex Linklater; Di Spiers, a Radio 4 producer; and the writer Lavinia Greenlaw. A shortlist of five stories will be broadcast on Radio 4 next March.

The winner will be announced in May 2006 and the story published and distributed by Prospect.

"Nesta is all about supporting innovation, and while the UK short story may not be new - with a strong history from Joseph Conrad to Will Self - it has been dormant for too long," said Chris Powell, chairman of Nesta.

"The National Short Story Prize will address this by filling a gap in the awards market and breathing life into this once great British literary form, helping it to identify and reward a new generation of talented UK writers."

The award will also form the centrepiece of a UK-wide campaign by Booktrust and the Scottish Book Trust, the national agency for readers and writers, to expand opportunities for British writers, readers, magazines and publishers of the short story.

Lucrative literature awards

The Man Booker Prize

The Man Booker Prize for Fiction is considered one of the world's most prestigious awards. In addition to the £50,000 prize, the honour has the power to transform the fortunes of authors. The most-recent winner was Alan Hollinghurst forThe Line of Beauty - he has since sold 10 times more copies.

Whitbread Book of the Year

The Whitbread Book of the Year was introduced in 1985 as part of the Whitbread Book Awards, established in 1971. The most recent winner, Andrea Levy, won for Small Island, earning her £25,000. After the award sales of her book rose to more than 4,000 copies within days and it has now sold 20,000 copies worldwide.

Orange Prize for Fiction

The Orange Prize for Fiction was set up in 1996 to celebrate fiction written by women throughout the world. Lionel Shriver won the award this year with her seventh novel, We Need to Talk About Kevin, receiving £30,000 and a limited-edition bronze figurine. Winners can expect to sell up to 10,000 paperbacks a month.

VS Pritchett Memorial Prize

A prize of £1,000 is offered for an unpublished short story in memory of the celebrated author Victor Sawdon Pritchett, who became famous as a result of his short stories. The 2005 recipient was the shopkeeper and sub-postmaster Jonathan Haylett, for his short story Bendera Beach.

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