The Swedish Academy, which chooses the literature laureate, said it recognised Handke, 76, for a body of work including novels, essays and drama "that with linguistic ingenuity has explored the periphery and the specificity of human experience".

Tokarczuk, 57, won for "a narrative imagination that with encyclopaedic passion represents the crossing of boundaries as a form of life", it said.

Both have courted controversy - Handke for his portrayal of Serbia as a victim during the Balkan wars and attending its leader's funeral.

Tokarczuk's work touches on dark areas of Poland's past that contrast with the version of history promoted by the country's ruling nationalist party.

Two prizes were awarded this year after last year's award was postponed over a scandal that led to the husband of an Academy member being convicted of rape.

Since then, the organisation has appointed new members and reformed some of its more arcane rules after a rare intervention by its royal patron, the king of Sweden.

Academy member Anders Olsson said both Handke and Tokarczuk had accepted their prizes.

"I only talked to Peter Handke myself. He was very, very moved. At first he did not utter any words," Olsson said.

"It is not a political prize, it is a literary prize," he added.

Australian Associated Press