Arctic Monkeys frontman Alex Turner has scored his third Mercury Prize nomination in as many years, with his side project The Last Shadow Puppets.
The band's debut album joins releases by Adele, Radiohead, Estelle, Laura Marling and Robert Plant with Alison Krauss on the award's shortlist.
The Arctic Monkeys' first album won the award in 2006, and their follow-up made the shortlist in 2007.
British Sea Power and Elbow are also in the running for this year's prize.
Electro-pop outfit Neon Neon, dubstep artist Burial, folk group Rachel Unthank and the Winterset, and jazz act Portico Quartet complete the 12-strong shortlist.
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Neon Neon is a side project of Super Furry Animals frontman Gruff Rhys. He told BBC News: "We're really happy that people are getting into it.
"We've got some festivals coming up and hopefully more people will now come to see us."
The nomination announcement in central London featured performances from two of the nominees, who are drawn from acts in the UK and Ireland.
'Unpredictable, unquantifiable prize'
Singer Laura Marling, 18, gave a gently lilting rendition of her ode to lost love, Ghosts.
Jazz outfit The Portico Quartet gave a percussive performance of their acoustic track Cittagazze, featuring Swiss instrument the hang - a melodic percussion instrument - creating an ethereal sound.
Hopefully this will be little window into the folk world for a lot of people
Rachel Unthank
Former judge Lauren Laverne, who announced this year's nominations, said the Mercury was "the most unpredictable, unquantifiable music prize there is".
"These 12 records say something about British music today. This is a really difficult list. Everyone deserves to be there on their own merit."
Sisters Rachel and Becky Unthank said they were "excited and overwhelmed" by their presence on the shortlist.
"Hopefully this will be little window into the folk world for a lot of people," Rachel added.
British Sea Power cornet and keyboard player Phil Sumner said the band were shocked to be nominated.
"It's a big surprise - we came back from Latvia yesterday and the first we knew of it was when we were told when we got back to the airport.
"They locked us in a van and told us to keep quiet about it."
The Last Shadow Puppets formed in August 2007 and is a collaborative effort between Turner and Miles Kane of Liverpool band The Rascals.
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Their album The Age Of The Understatement went to number one in the album chart in April, scoring Turner his third top album spot.
Radiohead's album In Rainbows hit headlines when it was initially made available online, with fans paying what they wanted to download the MP3 files.
The Mercury nomination is the first major recognition for the album, as the download sales were not reported to the UK chart compilers - making it ineligible for the Brit Awards.
Last year's Mercury Music Prize went to rock band Klaxons for their debut Myths of the Near Future.
They pipped Amy Winehouse and Arctic Monkeys to the �20,000 prize, which prompted a huge boost in sales of their album.
This year's prize will be awarded at a ceremony on 9 September, which will be screened live on BBC Two.
The nominees in full are:
Adele - 19
British Sea Power - Do You Like Rock Music?
Burial - Untrue
Elbow - The Seldom Seen Kid
Estelle - Shine
Laura Marling - Alas I Cannot Swim
Neon Neon - Stainless Style
Portico Quartet - Knee-Deep In The North Sea
Rachel Unthank & The Winterset - The Bairns
Radiohead - In Rainbows
Robert Plant & Alison Krauss - Raising Sand
The Last Shadow Puppets - The Age Of The Understatement
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