THERE is no greater award for a writer than the Nobel prize for literature. Five years ago the accolade went to VS Naipaul in recognition of his 50-year writing career.

Naipaul, born in Trinidad, also won the 1971 Booker prize (now the Man Booker) in Britain, where he has lived since 1950. It was awarded for In a Free State, his novel about displaced colonials on different continents.

Dennis Potter, the TV dramatist, praised its “lucid complexity”. He wrote: “Do not miss the exhilaration of catching one of our most accomplished writers reaching towards the full stretch of his talent.”

Surely the special qualities of such timeless prose would be recognised by today’s publishing industry? Surely a first-time novelist who matched the standard of Naipaul at his best would be snapped up?

The Sunday Times sent out the opening chapter of In a Free State to 20 agents and publishers to find out. Only the names of the author and main characters were changed.

None of the agents or publishers spotted the book’s true pedigree. And instead of experiencing Potter’s exhilaration, they all sent back polite rejections.

Typical was the reply from PFD, a major London literary agency. “Having considered your material,” wrote a submissions department reader, “we do not feel, we are sorry to say, sufficiently enthusiastic or confident about it.”

The Blake Friedmann agency also sent its apologies: “In order to take on a new author, several of us here would need to be extremely enthusiastic about both the content and writing style. I’m sorry to say we don’t feel that strongly about your work.”

Earlier we had also submitted copies of Stanley Middleton’s 1974 joint Booker winner, Holiday, to the same agents and publishers. Middleton, well- regarded in the literary world, has produced 42 books. Ronald Blythe, the author, once wrote in The Sunday Times: “We need Stanley Middleton to remind us what the novel is all about.”

But Middleton’s Booker winner also received a less-than- enthusiastic response. Bloomsbury, the London publisher, read the book “with interest” but found it unsuited to its list. Time Warner said the manuscript contained “good ideas” but it was not its sort of book. Thirteen others gave similar replies. Only one literary agent, Barbara Levy, expressed an interest in reading further chapters.

So why were two such “great” literary works overlooked? David Taylor, the novelist and critic, thought Middleton’s novel may now be regarded as “old-fashioned” but could not explain why Naipaul’s “timeless” work was ignored.

But he was not entirely surprised. “The sort of books being rejected would really shock you,” he said.

Nicholas Clee, former editor of the Bookseller, said that publishers were no longer keen to take risks on untried authors because they faced fiercer competition as the supermarkets forced down prices. He said: “Publishers tend to go for newcomers who have something sensational to offer, or established names. They’re putting big promotional efforts behind just a few titles.”

This has led to a growth in celebrity novels. For example Katie Price, the model known as Jordan, secured a deal to write two novels with Random House earlier this year.

Today’s authors have to be marketable. Taylor said: “Being 29, blonde, good-looking and vaguely famous should be enough to get you a book published nowadays.” Although there are still middle-aged novelists who buck the trend, our rejected version of Holiday was purportedly written by a 53-year-old man.

According to Doris Lessing, the author, publishers have become less willing to nurture talent. “The whole industry has changed so much,” she said. “They used to make an effort to keep first-time novelists in print. Maybe it took till the fourth book for the writer to take off. Now, if the first novel doesn’t attract any attention, they don’t take another one.”

There has also been an explosion in the number of aspiring novelists. Many are attracted by stories of huge advances even though, according to Taylor, no more than 20 writers of literary novels earn enough to survive on without another source of income.

Most of the major publishers have stopped operating a “slush pile” — their name for unsolicited submissions. Instead the work is passed on to the literary agencies, who themselves find it difficult to read everything. Many manuscripts are discarded after a few pages.

Carole Blake, of Blake Friedmann, receives up to 50 novels a day but takes on just six new authors a year. “We have two book agents and we’re pretty full,” she said. “So unless something leaps off the page as amazingly commercial or literary, it is very unlikely we will take new clients on.”

Bloomsbury, Time Warner and PFD were unavailable for comment last week. Barbara Levy said her agency was deluged with 1,500 manuscripts a year. Patrick Janson-Smith, of the Christopher Little agency, said: “We get masses, and it would be a foolish person who pretended they read every sentence.”

Mark Lucas, of the Lucas Alexander Whitley agency, said: “We would love to claim that absolutely everything that came in got extensively cross-examined. But successful agencies have rather full client lists . . . when you guys do things like this, it’s time for us all to celebrate. It shows there isn’t an absolute scale of values and nor should there be.”