Watchdog's threat to book awards that exclude whites

The watchdog has threatened legal action against the organisers of the Decibel Penguin Prize, which celebrates the best short stories by British writers from an Asian, African or Caribbean background, if they fail to call a halt to the contest.

The awards are a collaboration between the Arts Council England and Penguin Books. Their patron is Culture Minister David Lammy.

The Commission launched an investigation after a string of complaints about the contest being open only to entrants from ethnic minorities.

It concluded that banning white authors from competing was "unlawful" because it breached the Race Relations Act 1976.

Agnes Namoh, from the Commission, said yesterday: "Should the same competition run again, it is highly likely the Commission would commence legal proceedings against Penguin Books and the Arts Council."

Tory MP Philip Davies urged Mr Lammy, who is black, to say sorry for endorsing the "discriminatory" competition. He added: "What I would like to know is what would David Lammy think if someone set up a competition only for white authors. There would be no difference, legally or morally, between that and the Decibel Penguin Prize. They would both be equally discriminatory.

"The Decibel Prize is a prime example of the kind of political correctness that builds up resentment. We should celebrate the best of British literature, irrespective of the author's racial heritage."

Arts Council England – which receives National Lottery funding – has spent £8,000 a year on the prize, whose judges include former winner Hari Kunzru. The ten best entrants see their work published in a Penguin Anthology.

Julien Crighton, 34, a businessman from Arnold, Nottingham, lodged a complaint after hearing about the rules of the contest.

He said: "I took objection to the fact that if I had wanted to enter a short story in a competition funded by the taxpayer then I would not have been allowed simply because I am white. It is the kind of thing that fuels resentment."

Asked about the prize last year, Mr Lammy said: "Frankly, if the Tories want to stand on the ticket of criticising ethnic minorities, that's their choice. I don't believe the award encourages segregation."

Arts Council England was last night "reviewing its processes" for staging the competition in future.

The ruling also casts doubt on the future of the Decibel Writer of the Year award, handed out at the British Book Awards, which was won last year by Diana Evans for her debut novel 26a.