The Secretary of State for Culture, Media and Sport is urging companies to sponsor a "lower-brow" prize which would encourage different people to read.
He fears that when the Booker shortlist is announced this Thursday, it will put large sections of the population off books because it rewards inaccessible, highbrow works. While there are other annual literary awards, he argues, the Booker enjoys by far the biggest profile and yet does not cover the "broader range" of fiction.
The judges in Mr Smith's proposed initiative would emphasise the enjoyability of a book as well as its literary qualities. Friends stressed that he does not want Barbara Cartland to win the prize every year, but would like to see writers such as Nick Hornby or Helen Fielding rewarded. His own favourite authors include Julian Barnes, Ian McEwan and Salman Rushdie.
Mr Smith himself did a literary PhD at Cambridge, for which he wrote a thesis about the Romantic poets. However, he believes that many members of the public are alienated by the literary world and deterred by the esoteric choices made by the Booker judges.
He does not believe that novels such as AS Byatt's Possession and Ben Okri's The Famished Road, both of which have won the Booker in recent years, are immediately accessible to the ordinary reader.
The Booker is, of course, always the target of criticism - some years for being too populist, others for being too divorced from the world of the average book buyer. Last year's choice of Arundhati Roy's first novel, The God of Small Things, was, for example, deemed by many critics to be an overly accessible winner.
Gillian Beer, a Cambridge academic and chairman of the judges last year, remembers the accusations of dumbing-down all too clearly and so has difficulty following Mr Smith's case for establishing a new prize.
"I don't believe that the Booker is a prize that ignores the writer who is writing for a larger audience," she said.
"The God of Small Things is a great popular success, even though on the face of it, it is dense and elliptical. And Paddy Clarke Ha, Ha, Ha by Roddy Doyle was also a big seller."
However, the history of the competition, which was launched in 1969 and is now worth pounds 10,000 in prize money, is certainly not one of a slow drift towards the populist. On the contrary, it has always been lambasted from both sides. Back in 1971, the number of swear words included in the 42 entries was viewed as disgraceful by one judge - Malcolm Muggeridge. Far from elitist and dry, he described the line-up as "so full of four- letter words and every variety of sick erotica that I had to withdraw, nauseated and appalled".
This year's judges, Douglas Hurd, Miriam Gross, Nigella Lawson, Penelope Fitzgerald and Valentine Cunningham, have had to resist all the usual pressures as speculation about which books have made the shortlist increases.
Ms Fitzgerald, a former Booker winner herself, is prepared for the inevitable assault on the judges' choices.
"It is the same every year," she said. "But this prize is for the best book, and that is not necessarily the same as the best read. The WH Smith prize, on the other hand, is for the best read."
The 1998 shortlist is likely to feature Julian Barnes's satirical England, England, Beryl Bainbridge's Master Georgie, William Boyd's Armadillo, Ian McEwan's Amsterdam, Helen Dunmore's Your Blue-eyed Boy, Alan Hollinghurst's The Spell, and Nadine Gordimer's The House Gun.
The proposal for a new literary award fits in with Mr Smith's determination to make the arts more accessible. He has promoted the concept of "popera" - popular opera which is cheaper than traditional opera. When he was appointed, he also renamed the Department for National Heritage as the Department for Culture, Media and Sport because he thought the original name too backward-looking.
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