Book award judges relent and shortlist Harry Potter

After a controversial show of resistance last year, the leading British prize for children's books has fallen under the spell of Harry Potter. J K Rowling's third adventure featuring the bestselling boy wizard, Harry Potter and the Prisoner of Azkaban, will appear today on the shortlist for this year's Carnegie Medal. It follows the book's narrow failure to win the Whitbread Book of the Year Award, in which Seamus Heaney's translation of Beowulf pipped Harry to the post by a single vote.

Now Rowling will compete for the award alongside seven other novels, by authors including Jacqueline Wilson, Gillian Cross and last year's victor, David Almond. The winner will be announced on 7 July.

The Carnegie Medal, first awarded to Arthur Ransome in 1936 for Pigeon Post, is judged by a panel of specialist librarians from the Youth Libraries Group of the Library Association. The committee deemed last year that Harry Potter had the "tingle factor" but not the "linger factor" that it sought. In the event, only four out of the 13 librarians thought Rowling's book "outstanding".

This time, the judges praise Rowling for "a beautifully written book, often dark and with a strong plot". Yet Harry will face formidable opposition. The second book by the north-east writer David Almond, Kit's Wilderness, has picked up plaudits for its powerful blend of realistic and supernatural elements, after his success last year with Skellig. The Illustrated Mum, by the perennial children's favourite Jacqueline Wilson, aroused admiration for a frank and funny treatment of a mother's manic-depressive illness and its impact on two sisters' lives. The remaining titles on the Carnegie shortlist are Bernard Ashley's Little Soldier, Aidan Chambers' Postcards from No Man's Land, Susan Cooper's King of Shadows, Gillian Cross's Tightrope and Jenny Nimmo's The Rinaldi Ring.

The success of the Harry Potter books helped Bloomsbury Publishing announce yesterday that its pre-tax profits were up 66 per cent to £2.6m.

The fourth book in the series is already Bloomsbury's current bestseller, with a million-copy first edition planned, on the strength of firm orders, even though it is not due to appear until July. It is rumoured that in the book the young wizard will begin to encounter the hormonal storms of adolescence.

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