Arts corespondent Razia Iqbal: "Saramego joins the illustrious list of Nobel writers"

In its commendation, the academy said it had awarded the prize to Mr Saramago "who with parables sustained by imagination, compassion and irony continually enables us once again to apprehend an illusory reality".

The works of the 75-year-old novelist and poet, who mixes magical realism with hard-edged political comment, have been translated into 25 languages and he is Portugal's best-known living literary figure.

His greatest work is The Stone Raft - published in 1986 - in which he imagined Spain and Portugal breaking off from Europe and floating into the Atlantic.

He wrote his first novel in 1947 but had to wait some 35 years before winning critical acclaim with works such as the Memorial do Convento about the building of the convent of Mafra outside Lisbon.

The book was described by the late Italian film-maker Federico Fellini, a lover of exuberant images, as one of the most interesting he had ever read.

The story, a fantasy about two lovers trying to escape the Inquisition in a flying machine, was turned into an opera and performed at Milan's La Scala in 1990 with the title of Baltasar and Blimunda.

Mr Saramago has continued to turn a sharp, critical eye on Portugual's history, its assumptions and beliefs.

The writer heard he had won the prize as he was about to leave Frankfurt in Germany where he had been attending the world's largest book fair.

"This is a proud moment for Portugal, this is the first time we have won the Nobel Literature Prize," said his publisher Jose Oliveira.

He hailed Saramago as "a highly literate writer as well as a best seller".

The author, whose books have been translated into more than 25 languages, was born in Azinhaga, in the Portugese province of Ribatejo but now lives in Lanzarote, in the Spanish Canary Islands.