A novel renaissance. But modern England offers no inspiration

The paradigm British novel of 2002-03 is one that begins with reminiscences of Victorian childhood, then relocates the hero or heroine to China, Japan, India or a similarly exotic location, to become embroiled in a life of crime. The only thing the novelist will probably not be writing about is modern England.

These were the conclusions of a panel of commentators assembled by The Independent at the Cheltenham Festival of Literature yesterday to discuss the prevailing themes and obsessions of young modern writers – and to identify the young authors who hold the future of the British novel in their hands. The debate was led by Ian Jack, editor of Granta, the influential magazine of new writing, Kate Mosse, the novelist and founder of the Orange prize, and Boyd Tonkin, literary editor of The Independent.

"Modern England suffers from a lack of ambition and description in novels," said Jack. "By contrast, we're up to our necks in modern Scotland and modern Ireland. Many writers are haring off to China and India. There's a burden of the literary past in England. Having 250 years of great fiction behind you can be a gift or a burden, a yoke you have to throw off. It weighs on the shoulders of the young." But, after years in the shadow of America, the British novel is experiencing a renaissance, with a slew of eclectic young writers whose work in the crime and fantasy genres should allow them a seat in the canon of 21st-century literature.

One reason for optimism, the panel agreed, was the waning in influence of such hyper-vivid stylists as Martin Amis and his peers. "There's a tree called the upas tree that blights everything in its shade," declared Jack. "I think the generation of Amis, Rushdie and McEwan did that. But a distance of 20 years is enough. Not so many young men are trying to be Martin Amis now."

Still, few young writers were disposed to explore modern England as a subject for epic fictional treatment. "Everybody's writing about Britain in the past and Britain in the future," said Tonkin. "Nobody wants to write about the present. It's only Americans who want to write a thumping great account of their period."

Other writers whose names earned honourable mentions included Andrew O'Hagan, Rachel Seiffert and Philip Hensher. "The future is in safe hands, as far as the writers are concerned," said Tonkin, "but I'm not so sure about the publishers. The first novelist will always be the darling of the marketing department for one season; but after that there are problems if you come up with novels that are quite different from the one that made your name. I think these are much worse than the problem of 'Is there enough talent around?'. I think there certainly is."

Mosse predicted the imminent decline of the post-Bridget Jones novel that has been clogging British bestseller lists for the past five years. "Personally I don't think chick-lit novels will sell for that much longer," she said.

"There's something very artificial about the marketing of that, the fact that they all look the same, they're all Day-Glo. It's like buying a cheese and pickle sandwich every day. You know what you're getting with it, but it's not very exciting."

Asked to nominate the creative writers who would be regarded as significant in 20 years' time, the panel chose: Claire Messud, author of The Hunters and The Last Life; Zadie Smith, author of the bestselling, recently televised White Teeth; Sarah Waters, whose Victorian-lesbian novel Tipping the Velvet has caused a mild scandal on BBC2, and whose third novel Fingersmith is strongly favoured to win the Booker prize tomorrow; and David Mitchell, whose books Ghostwritten and number9dream are set in exotic locations in the Far East and the Pacific Rim.

The judges' deliberations came at the end of a week in which the literary world waited, fruitlessly, for an announcement that never came – the "long list" of writers chosen by Granta magazine as representing "the Best of Young British Novelists" in 2003. This literary fashion parade, masquerading as a snapshot of the cultural zeitgeist, is an eagerly anticipated successor to the "Best of Young British" selections in 1983 and 1993. The first, promoted by the Book Marketing Council, presented an explosion of new talent – Martin Amis, Julian Barnes, Ian McEwan, Salman Rushdie, Rose Tremain, William Boyd et al, collectively known as the "Amis Generation" – to the reading public. The second list fared less well. The selection of talents (who included Will Self, Adam Mars-Jones, Jeanette Winterson, Ben Okri, Helen Simpson and Esther Freud) was dismissed as lacklustre and unexciting by cultural commentators who complained that the best writing in Britain was to be found outside the environs of fiction.

The new Granta Top 20 is to be announced in January. An interim "long list" was due to have been released last Tuesday, but there was no puff of white smoke from Granta's north London headquarters. Eventually it emerged that the judges were defeated by the sheer unwieldiness of the task. "It wasn't that they couldn't agree," said Jack. "There were just too many books to read. And there were questions about getting a long list for something that is itself a very long list."

In the meantime, the Cheltenham Festival heard a ringing endorsement for books that refuse to follow an agenda or trend – like Tipping the Velvet, "a cult lesbian novel that was changing hands under the counter" before it was taken up by the general public.

Waters' name was the only one to be unanimously voted as one of "The best British novelists of 2002-03". Whether we will still be hearing it in 2023 is a question only the reading public can decide.

The young contenders: Eight british novelists from the top shelf

Nicola Barker, 36

A former hospital cook and bookmaker's clerk, Barker says her writing, focused on marginal lives, is influenced by the part of east London where she lives. In 2000, she won the world's richest fiction prize, the £75,000 Impac award, with Wide Open, about two brothers from the Isle of Sheppey.

Philip Hensher, 37

The author of an opera libretto and a PhD in 18th century satire, Hensher is one of the more prolific and outspoken contemporary writers. He was sacked from his job as a House of Commons clerk in 1996 for remarks made in an interview with a gay lifestyle magazine about MPs after Kitchen Venom, the second of four novels, was published. He is now a columnist for The Independent.

Courttia Newland, 28

After leaving school at 15 and pursuing an unsuccessful career as a rapper, Newland began his first novel, The Scholar, on his 21st birthday. From a Jamaican-Barbadian family, he has earned a reputation as one of Britain's best black writers with his hard-bitten tales of life on an inner-city housing estate, a genre he says that he now wants to move away from.

Sarah Waters, 36

Propelled into popular consciousness and tabloid headlines by the televising of Tipping the Velvet, her no-holds-barred tale of Victorian lesbianism, Waters has completed the move from the niche of gay literature to the mainstream. Her fourth novel, Fingersmith, has been shortlisted for the Booker prize. Born in Pembrokeshire, she now lives in Brixton, south London.

Zadie Smith, 27

At the age of 27, Smith is already the grande dame of young British novelists. White Teeth, the first work in a two-book deal worth £250,000 which she signed in her final year at Cambridge, won several awards and sold more than a million copies in Britain. Her latest work, Autograph Man, was widely tipped for this year's Booker prize but was not shortlisted and earned mixed reviews.

Andrew O'Hagan, 34

A Glaswegian who started his literary career as an essayist for the London Review of Books before spending two and a half years on his acclaimed first work, The Missing, about parents whose children have disappeared. His debut novel, Our Fathers, was shortlisted for the Booker in 1999. He lives in Belsize Park, north London.

Claire Messud, 36

Born in the United States to a French-Algerian father, Messud worked as a waitress and journalist in London before turning full time to fiction. Her two most recent novels, The Last Life, and The Hunters, have been praised for their simplicity and observation. She lives in the US, where she teaches creative writing.

David Mitchell, 34

Much of the detail of Asian life in his first two novels, Ghostwritten and number9dream, is inspired by the eight years he has spent living in Hiroshima. The Lancashire-born son of two artists has won praise for his taut thrillers which pay homage to Japanese writing.