Former postwoman turned novelist and Birmingham Post columnist Catherine O'Flynn has started the new year on a high by winning a prestigious national literary prize.

She won the First Novel Award for What Was Lost - which was rejected 15 times by publishers - at the Costas, formerly the Whitbread Prize.

The judges said: "A formidable novel blending humour and pathos in a cleverly constructed and absorbing mystery. An extraordinary book and a superb first novel."

The 37-year-old worked as a mystery shopper, postwoman and box office assistant while writing the book, the story of a security guard who spots a child on CCTV 20 years after she disappeared, only to see it turned down by publisher after publisher.

It was finally picked up by Birmingham-based Tindal Street Press and went on to be nominated for every award going, including the Man Booker Prize and the Orange Broadband Prize for Fiction.

Ms Flynn, who lives in Hall Green and still works part-time at the Midland Arts Centre, said: "It took 15 attempts for me to get an agent with this book, but I'd read somewhere it could take as many as 150 rejections, so I actually thought this was quite quick.

"I do seem to have spent most of 2007 talking about What Was Lost, and to be included on so many lists, so to actually be getting an award this time feels fantastic.

"The way it's been received has convinced me that this is something I should continue with, but I never assumed that I was going to win any award, especially as it's my first book.

"But I am looking forward to getting all dressed up and celebrating at the ceremony. Then maybe I will start thinking about what the next novel will be about."

Scottish stand-up comedian AL Kennedy, who is an ordained minister and an associate professor with Warwick University's creative writing programme, won the Novel Award for Day, hailed by the judges as a "masterpiece".

Her fifth book, it is the story of a Second World War veteran who confronts his past while working as an extra in a prisoner of war film.

There are five categories in the awards - Novel, First Novel, Biography, Poetry and Children's Book.

Each of the winners receives £5,000, and will go on to compete for the £25,000 overall Costa Book of the Year, to be announced at a ceremony on January 22.

The Children's Book Award went to Ann Kelley for The Bower Bird. Kelley's story was inspired by her son, Nathan, who was born with a congenital heart and lung condition.

He spent his childhood bravely battling his illness, and died aged 24 a week after an organ transplant operation.

The main character in The Bower Bird is Gussie, a spirited 12-year-old who suffers from the same condition and is waiting for a heart transplant.

"She knows her time is short and she is determined to live every moment of it. She has that in common with my late son Nathan," said Kelley, 66, who lives in St Ives, Cornwall and also has a daughter, Caroline.

When Nathan was born, doctors said he would not survive the week, and later warned that he would never walk.

He defied both predictions and became a brilliant student, going on to study space sciences at university, despite suffering a heart attack at 13 and a mild stroke while sitting his A-levels.

In December 1985 he received an organ transplant at Harefield Hospital, Middlesex, but never regained consciousness and died a week later.

Kelley, who failed her English Literature O-level, began writing poetry about her son following his death. In 2005 she published her debut novel, The Burying Beetle, in which she introduced the character of Gussie.

The Bower Bird is the follow-up and came out last year. It was published by Luath Press, a tiny independent publisher in Edinburgh.

Kelley has admitted that when her publisher telephoned her in November, her first thought was: "Oh no, the company has gone broke."

Simon Sebag Montefiore's acclaimed study, Young Stalin, won the Biography Award, and Jean Sprackland picked up the Poetry Award for Tilt, her third collection.