Children's literature prize for Australian Oscar winner

Australian illustrator Shaun Tan's life in recent weeks has been as fantastical as his children's books.

The author and illustrator of five books last month won an Oscar for his short film adaptation of one of those tales, The Lost Thing.

Overnight he was awarded the Astrid Lindgren Memorial Award in Sweden - the world's largest children's literature prize, which carries with it five million krona in prize money (NZ$100,000).

Tan was washing-up at his Melbourne home when he received the call late on Tuesday night from the Swedish judges.

"I had my hands in the sink when this phone call came and I thought, 'Who's ringing me now?' I was actually slightly annoyed by it," Tan told AAP.

"I couldn't recognise the number or the country code.

"I was on the verge of dismissing it, but I thought, 'I'm probably going to have to ring them back and it's going to be expensive, so I better answer it'."

The Astrid Lindgren Memorial Award is presented annually to honour an outstanding author, illustrator or oral storyteller in children's and young adults' literature.

The panel lauded Tan for his reinvention of the picture book.

"Shaun Tan sees every book as an experiment in visual and verbal storytelling," his award citation read.

"Tan has reinvented the picture book by creating visually spectacular pictorial narratives with a constant human presence."

The humbled author/illustrator said he was honoured and stunned to win the award from the 170-odd nominees worldwide.

"Many of these people I've grown up reading. Their books are all over my bookshelves, many of them have been inspirations for me in deciding to become a picture book illustrator so this feels really bizarre," he said.

Tan predicts the award will act as a confidence booster next time he sits down in front of a blank page.

It should also secure interest in his next book project, currently being shopped around Europe by his publisher.

"A lot of people assume if an artist has some success, commercial or critical, that their confidence is assured," Tan said.

"Every time I start a new project the thought that's constantly flashing in my mind is 'What the hell am I doing?'

"You know that in order to produce good work you have to do something you've never done before and that's quite scary.

"I think in part this award is recognition that that's okay, because every book I've done has been an experiment."

The 37-year-old said he had barely had time to work how to spend his prize money.

His most notable works includes illustrating The Rabbits, written by John Marsden, and writing/illustrating The Arrival, The Red Tree and The Lost Thing.

In February Tan won the Oscar for Best Animated Short Film for his 15-minute film The Lost Thing.

The story is set in a fictional Perth and follows a boy's attempts to find a home for a creature, part industrial machinery, part crustacean.

He is tight-lipped about his next book, tentatively set for a 2013 release date.

"I think it's going to be something to do with sibling relationships," he said.

Melbourne novelist Sonya Hartnett won the 2008 Astrid Lindgren Memorial Award.

-AAP