Rose Tremain's short stories single her out among nominees for the Frank O'Connor award, writes Eileen Battersby, Literary Correspondent.

Literary prize shortlists have their own appeal; a handful of books, selected from a longlist, climb into the ring and here goes. The authors are heroes awaiting an outcome determined by judges who may be known to some of the contenders, may even be pals, or good grief - may even be sworn enemies or ex-buddies, or the ultimate difficulty, be either a blood relative or former teacher of an unfortunate contender who then stands to be exposed by the media.

Nowadays in our age of hype, in the run-up to the shortlist, we even get to find out who was on the longlist. This adds to the debate and of course earns the contest and sponsor further exposure. It allows us, the readers, our initial period of lamentation and bet-hedging such as who was overlooked and got on and who should make it to the final.

It is a bit like hauling shipwreck survivors out of the sea. Here they are, now who is going to beat everyone else, thanks to politics, favouritism, celebrity status, a previous track record - not forgetting literary merit - and take the prize. Darwin would be thrilled - or perhaps he wouldn't be fully convinced unless the losing writers actually died in the struggle. The winning writer gets to wear the laurels - but the readers are the real victors.

JUST WHEN IT seemed we had been Bookered-senseless and Impac-intrigued to the highest levels of international fiction wonders from afar, along came a prize last year that was as welcomed as it was belated, a trophy for excellence in that art of arts, the short story.

Fittingly, it was called the Frank O'Connor Short Story Award. Named after one of the masters of the form, it was launched in Cork, birthplace of the great O'Connor, born Michael O'Donovan in 1903. In 1939, already established as a writer on the publication of the Guests of the Nation collection in 1931 and subsequent stories, O'Connor set off for the US to lecture at various universities and also became a regular contributor to the New Yorker.

Through his association with that magazine, he became close friends with his editor, William Maxwell, literary mentor and gifted writer. Some insight into their warm friendship may be grasped by reading The Happiness of Getting It Down Right (1996), a volume of their letters. But that title deserves special attention - "getting it down right" could also be seen as the personal manifesto of a writer, any writer, all writers. And for all the great and several claims of the novel as a form, most writers would agree that the ultimate challenge is crafting a great short story - at its finest a short story conveys more than a novel many times its length.

One need look no further than Joyce for that. His greatest achievement remains the heartbreaking The Dead (from Dubliners), not the calculatedly ambitious Ulysses. John McGahern's finest work is to be found in his short stories. The same applies to another master, William Trevor, and line for line, the best of the great John Updike is to be found in the stories, most particularly, his masterpiece, A Sandstone Farmhouse (from Afterlife, 1999).

The inaugural Frank O'Connor shortlist last year highlighted six collections including three Americans. Two of those volumes, David Means's The Secret Goldfish and Bret Anthony Johnston's Corpus Christi, were among the finest of the current generation of US and international exponents of the short form. The menacingly original Means possesses surreal flair and crafts offbeat fiction that looks to the world of film-maker David Lynch.

Johnston is engaged by the human dilemma as filtered by memory. His domestic realism echoes that of Richard Ford, one of the finest writers at work, anywhere. Neither Means nor Johnston won - their loss was also the prize's loss.

This year's shortlist suffers because of the quality of its omissions; shortlists are often difficult to agree with, but rarely has one proved as strange as this selection, which includes only one authoritative and convincingly crafted collection, British writer Rose Tremain's The Darkness of Wallis Simpson. Tremain's book is a revelation for anyone who had previously read her novels. This is a fine book and with its honourable echoes of Maugham, Saki and VS Pritchett, is her best to date. Here is a collection that respects the form.

Aside from Tremain though, the shortlist does baffle, should one consider the talent on the longlist. In fact the Frank O'Connor longlist - graced by outstanding collections such as the US veteran writers Thomas McGuane's Gallatin Canyon and Deborah Eisenberg's Twilight of the Superheroes; the beautifully vibrant debut A Life Elsewhere by Nigeria's Segun Afolabi, Briton Helen Simpson's Constitutional, and Bernard MacLaverty's Matters of Life and Death - is a list worthy of any prize.

MacLaverty's exclusion is a repeat of William Trevor's last year. It is understandable - if you want your prize to be taken seriously internationally, it does make sense not to have a local writer win the first time. Still, MacLaverty's collection is a major work, containing several of his finest stories.

It was only in its 11th running that the Impac prize finally had a home win; not even John McGahern, when looking a certain winner, was able to defeat the international challenge - and this stood to the prize. But as early as this, its second year, there is an Irish Frank O'Connor prize contender - and it is not MacLaverty - in Philip O'Ceallaigh's determinedly European Notes From A Turkish Whorehouse.

I didn't much care for this highly assured collection but it is a strong challenger and its tone of jaundiced disengagement is vastly more compelling that that of Swiss writer, Peter Stamm's repetitive tales, In Strange Gardens and Other Stories. Stamm tends to do the same thing: write about young men drifting through life and/or dissatisfying vacations. Not even the involvement of the gifted Michael Hofmann, poet and one of the most astute literary translators at work, can lift these largely first-person narratives on to a higher level.

O'Ceallaigh's narratives are as unattractive as life itself and that was his intent, a realism that jarred rather than beguiled.

Anyhow, why not have an Irish writer on the shortlist? Even if the prize is only in its second year. No less a writer and critic than Richard Ford when writing in his introduction to The Granta Book of the American Short Story in 1992, paid homage to O'Connor and presented the Irish with ownership of the short story. The Irish literary roll of honour is impressive - as is the US one. The difficulty is that the five omitted books listed above, would have, with Rose Tremain's impressive collection, presented a shortlist from which selecting a winner would have been very difficult.

The presence of the Japanese writer Haruki Murakami on the shortlist was initially a surprise. He is a novelist, not a short story writer. On reading Blind Willow, Sleeping Woman, this gathering of his assorted bits and pieces, some of which feature as chapters in his admittedly episodic novels, its inclusion becomes an insult.

He is a major international figure and novels such as The Wind-up Bird Chronicle and South of the Border, West of the Sun, testify to his exuberant originality. But having read all of his books to date, I can say he is also repetitive and often self-indulgent and overly reliant on the same theme, authorial self-obsession.

"To put it in the simplest possible terms," he writes in his ill-judged, simplistic introduction to this bogus collection, "I find writing novels a challenge, writing short stories a joy." How about "To tell the truth, though, from the beginning of 1990 to the beginning of 2000 I wrote very few short stories. It wasn't that I had lost interest in short stories. I was just so involved in writing a number of novels that I couldn't spare the time"? If such sloppy admissions fail to send shock waves through the community of writers and readers who take the short story seriously, then the short story is in serious trouble.

Luckily Updike, Proulx and Trevor do "spare the time". A Murakami win might attract a great deal of attention for the prize, but it would be for the wrong book.

Also shortlisted is Nepalese writer Samrat Upadhyay's The Royal Ghosts. American reviewers have compared him to Trevor and Chekhov. Although none of the nine stories gathered in this, his third book, justify such praise, this is an attractive, pleasing collection which is well observed and often thoughtful - although it consistently fails to match the quality of Afolabi's narratives.

IF THE STAMM book with its predominately first-person narrative voice is disappointing, American Rachel Sherman's sub AM Homes, overly knowing collection, The First Hurt, is offensively crass. "Bunk K is made of logs and screens and filled with 11-year-old girls. These girls still wake up easily and early; they do not wear deodorant yet. They are still lithe, still children, and pretty, still, in an undeveloped way. I am their counselor, and sometimes they watch me in the shower." This story is set in a summer camp and the narrator's approach to both dealing with children and her own conduct as a camp counsellor, is typical of the out-to-shock style of stories that are devoid of either feeling or texture. How any panel could select this and leave out the likes of MacLaverty or McGuane or Afolabi defies understanding, never mind straightforward literary criticism.

There can be no doubt that Tremain should win this prize, even on the strength alone of her chillingly evocative title story which is, as it suggests, a recreation of the closing days of the life of Wallis Simpson. The 12 stories in these collection are exciting, strange, diverse and crafted. None of the other books can offer such a compelling range of good short stories. Philip O'Ceallaigh has certainly found his voice and is true to his theme, that of the cruel games people play. O'Ceallaigh and Upadhyay are short story writers - they have the timing - yet Tremain, an established novelist and accomplished short story writer, demonstrates a mastery here in a small book that is rich in those elusive moments of clarity and finality that make stories live.

There is no doubt she is in a class of her own in this selection, but the real winners, such as Thomas McGuane - representing the finest of US short story writing - and Bernard MacLaverty, did not get beyond the longlist.

The Frank O'Connor Short Story Award winner will be announced on Sunday