This is the best thing that's ever happened to us, admit Mercury Prize-winning Elbow

The group have been together for 18 years but are hardly household names and lead singer Guy Garvey said 'I know we're supposed to be cool, but this is the best thing that's ever happened to us' as he accepted the award from Jools Holland.

Their album, The Seldom Seen Kid, is their fourth and beat 11 others to win the title and £20,000.

Elbow's fourth studio effort darts between sparse electronica, flamenco-influenced beats and Led Zeppelin-inspired rock.

As he took to the Grosvenor House stage clutching a glass of wine, Garvey dedicated the award to friend Bryan Glancy, the Mancunian singer-songwriter who died aged just 39 in 2006.

He added: 'I look at it the way Bedouin tribes look at a bowl of milk - it doesn't happen often but it's all the sweeter for it.'

When asked what they would do with the £20,000 prize, they said: 'Spend it'.

As Mercury winners, the band can also look forward to sales taking off, as with non-mainstream acts that also claimed the top prize, such as Badly Drawn Boy (2001), PJ Harvey (2005) and Antony & The Johnsons (2005).

The group Elbow celebrate after winning the Mercury Music Prize

Elbow, winners of the 2008 Nationwide Mercury Prize, with their award at the ceremony at the Grosvenor House Hotel in London

Rivals: Singers Estelle and Adele were both nominated for the Nationwide Mercury Music Prize but left empty-handed

Big rivals Estelle and Adele were left disappointed and they kept their distance throughout the ceremony following a war of words in which Estelle, who topped the UK singles chart with song American Boy, accused the British media and music industry of being blind to black soul talent.

Led Zeppelin legend Robert Plant and singer Alison Krauss

Earlier this year she told The Guardian: 'Adele ain't soul. She sounds like she heard some Aretha records once, and she's got a deeper voice - that don't mean she's soul.

'I'm not mad at , but I'm wondering - how the hell is there not a single black person in the press singing soul?'

But clearly the singer was happy to be recognised along with her peers, following her album's release. She said: 'It feels really great. I'm happy that, after all the feeling and hard work that went into this album, people love it.'

Adele's debut album 19, which features her powerful voice, was also put forward.

She said on her official website: 'The whole album is about being between 18 and 19; about love.'

The music prize champions UK music and is open to all genres of music. It attracted around 240 entries this year, more than ever before, said organisers.

The other shortlisted acts were Radiohead, Estelle, Last Shadow Puppets, Adele, Robert Plant and Alison Krauss, British Sea Power, Rachel Unthank and the Winterset, Laura Marling, Portico Quartet, Burial and Neon Neon, the alter ego of Super Furry Animals frontman Gruff Rhys .

Last Shadow Puppets: Arctic Monkeys Alex Turner with Miles Kane of The Rascals, who were nominated for their new project

Radiohead's much-acclaimed In Rainbows was first released last year as a download, for which fans could select their own price.

Chairman of judges Simon Frith said previously: "It's been a strong year for UK music and we again saw a rise in the number of albums entered for the prize.

"One of the intriguing developments is the increasing blurring of different genres, with musicians clearly absorbing influences from a growing array of divergent sources - resulting in some great albums."

Folk band Rachel Unthank opt for vintage style and a monochrome look

Frith said that about 240 albums had been put forward, which surprised him as he kept reading in the media that people do not make albums any more.

The shortlist of 12 albums of the year is chosen by a panel of musicians, producers, presenters and music journalists.

The decision is based solely on the music on the albums rather than on commercial sales success, organisers said.

Albums released between July 2007 and July 2008 were eligible for this year's prize and previous winners include Klaxons, Arctic Monkeys, Antony and the Johnsons, and Dizzee Rascal.