Birmingham author Catherine O'Flynn last night narrowly missed out on one of the country's leading literary prizes and a £25,000 reward.

Novelist and stand-up comedienne AL Kennedy, the bookies' favourite, won the Costa Book of the Year for her novel Day. The Dundee-born author, 42, who deliberately did not publish under her full name of Alison Louise Kennedy to remain anonymous in case people did not like her work when she started off, beat four other writers to the award.

Her fifth novel, the story of a Second World War veteran who confronts his past while working as an extra in a prisoner of war film, was hailed by judges as "a masterpiece" containing a shadow of "James Joyce in it".

Chairwoman of the judges, best-selling author Joanna Trollope, said What Was Lost, O'Flynn's debut novel - published by Tindal Press, based in the Custard Factory - that was rejected by publishers 15 times, came a close second for Book of the Year, "making it a very close run".

She said of the prize: "It's not really about trying to compare the books because you can't. The aim is to find an accessible book because this book prize is as much about readers as writers. It's one of its chief charms."