Anne Fine, the children’s laureate, says she has made more speeches in the past 18 months than any person should be asked to attempt. But at the awards ceremony for the Scottish Arts Council Book of the Year and Children’s Book of the Year in Edinburgh last week, she found the words to underline once more the importance of writing and publishing books for children.

“Children’s writing has always been the most broad of the writing churches, and children instinctively know that books can take you anywhere, anytime,” she said.

Thirty-eight children’s books were considered for this year’s award and from a shortlist of three the judges chose Oranges and Murder, Alison Prince’s 19th century mystery set in the brutal world of the London costermonger. The other contenders were Room on the Broom by Julia Donaldson and Pure Dead Magic by Debi Gliori.

Introducing the awards, SAC chairman James Boyle emphasised the need to trumpet Scotland’s literary successes. “We want to celebrate writers,” he said. “We want Scotland to be a good place to live and to write.”

The total prize money for the awards has increased from last year’s pound;13,000 to pound;23,000 (most authors in Scotland earn less than pound;5,000 annually from their writing). The overall winner, who was announced as Inverness writer Ali Smith for her second novel Hotel World, received pound;10,000 and the winner of the children’s book award pound;5,000. For the first time children’s books were eligible to win the main award.

Ms Prince, who was born in Kent of a Scottish mother and a Yorkshire father, now lives on Arran, a place which provides the inspiration for many of her books, she says. Since she began writing for children’s television in the 1960s, she has been a prolific author. At the age of 70, she is writing as much as ever. “I think that if I stopped writing I would drop down dead,” she says. Currently 16 of her books are in print, but another 43 languish out of print.

“The life of a book has become very short,” she says. “It’s a common complaint of parents that when they go looking for a book that their first child enjoyed, five years later when the next child wants to read it, it is out of print. It means a book never gets the chance to become established. It is the death of the classic.”

Oranges and Murder deserves to become a classic. Meticulously researched, the hugger-mugger of the London streets, the sounds and smells and colours of long ago permeate the thrilling story of a working-class boy whose mysterious parentage is a secret dark enough to inspire murder.

Ms Prince, knowing she wanted to write about 19th century London, went to Charles Dickens’ own source, Henry Mayhew’s London Labour and the London Poor. “I really soaked up the detail. I went down to London and I dug around in the East End. Obviously there has been huge clearance and rebuilding, but scraps of it are still there.”

The effort has paid off. The dark alleyways and bright market squares, the bustling shops and squalid, overcrowded houses are utterly convincing. London, raw, cheerful and corrupt, seems akin to Naples or Venice, a dangerous but profoundly human place.

While research is important, Ms Prince warns that “you have to make sure it doesn’t poke through the story. You don’t want readers to think it’s a history book. You have to make it worth their while to read on.”

Receiving the award, she says, gives her “a wonderful sense of being in touch with the outside world. Writing is a lonely business and once you’ve finished a book you have no control over what happens to it. Just occasionally one does really well and that is like seeing one of your children take off and fly.”

Since Jenny Brown took over as SAC literature director in 1996, children’s writing has become more important in the arts agenda in Scotland.“Our timing was right,” laughs Ms Brown. The department’s first big foray into supporting children’s literature landed applications from JK Rowling and Julie Bertagna, and since then children’s authors have enjoyed an unprecedented share of the literary limelight.

The annual book awards are only one element of the SAC’s involvement with writers, Ms Brown points out. The two other shortlisted children’s authors, Debi Gliori and Julia Donaldson, have both benefited from SAC assistance. Ms Gliori received pound;4,000 to help her change of direction from picture books to novels for older readers, while Ms Donaldson’s three-year stint as writer-in-residence in Easterhouse gave her the time to develop her writing.

Ms Brown hopes to develop the awards further next year, tying them into a national readership development scheme which will train librarians in all the Scottish local authorities to promote contemporary literature to young readers. If it is not too radical a suggestion for the SAC, it would also be good to see some young readers on the judging panel.

Wherever children’s authors are gathered together, the subject of libraries comes to the fore and, accepting her prize, Ms Prince made a plea of support for the library service. Looking back at 35 years of writing for children, she says she has seen many ups and downs for children’s literature “but the overall disaster is the short-changing of libraries.

“If the shortening of opening hours and the cutting of budgets continues, then we are looking at a very endangered service. Children go through so many books, libraries are absolutely essential to them. And if the libraries don’t have the books children want to read, then those people who can’t afford to buy books will lose their access to reading.

“That is a tragedy. And those who think about the readers of the future need to take it seriously.”