Junk, by 43-year-old Melvin Burgess, aimed at teenagers aged 15 and over, won the Library Association's Carnegie Medal, known as the Booker of the playground.
The prize, whose shortlist also included two books about bullying and one about a violent child arsonist, is judged by a panel of 13 children's librarians.
Celebrating its 60th year, the award was first won by Swallows and Amazons author Arthur Ransome. Mr Burgess's book is light years away from Ransome. It tells how a pair 14-year-old runaways slide into a nightmarish underworld of drug abuse.
At one point, one of the narrators, Gemma, describes working as a prostitute: "Yeah, money's easy. You can earn it standing in a doorway or flat on your back or in the back of someone's car. You can use your body same as other people do - carpenters, mechanics, gardeners."
In another section, she eulogises heroin, saying: "Chasing the dragon ... it's like Chinese magic ... you feel like Romeo did when he finally got to bed with Juliet."
The front cover of the book is a kaleidoscope of words such as Drugs, Sex, Heroin, Anarchy, Rave.
One character, Lily, uses heroin while breast-feeding: "All the veins in her arms and behind her knees have gone where she's poked around with the needle so much, so she injects into the veins between her breasts. I've seen her sitting with the baby on the breast poking about to find a vein. `Nice fat veins when your tits are big and milky,' she said."
In an interview with The Independent today, Mr Burgess tells how his late brother was a drug addict. He is indignant about criticism of the book, saying: "It is just nonsense that anyone should object to any child who is 14 or 15 reading something like this."
The book was defended by Lesley Sim, chairwoman of the Youth Libraries Group judging panel. She said: "Junk is an outstanding, ground-breaking book - an extraordinary mixture of social commentary and gripping drama."
But others were more critical. BBC's The Bookworm programme is conducting its own poll of the nation's favourite children's books, and has been talking to children about the Burgess book.
The programme's editor, Daisy Goodwin, said yesterday: "It is drug tourism for middle-class children. Every year now this prize goes to a book that has the goriest, socially shocking subject matter, and I'm not sure that's what children's literature should be about. The best children's books are an escape from all of that.
"The children we have been talking to are impressed with the book because it's about such a sexy subject. It's not impossible that it will win our poll, but I hope it doen't. Would you want your child to read Junk?"Reuse content