Leading article: Literary prizes: you just can't put them down

This is getting silly. The Orange Prize for fiction by women, awarded this week to the Canadian writer Anne Michaels, has itself been shortlisted for a prize for the best sponsorship of the arts by business. There are now more than 300 literary prizes in the British Isles, nearly one for every day of the year. There are prizes for painting, drawing, sculpting, installing and displaying people as exhibits, not to mention music, film, theatre and any other non-functional human activity that business people in suits can be persuaded is Art. And now there are prizes for prizes.

It is all part of the sea-change in the relationship between business and the arts over the past 15 years. Over the two decades before that, from the mid-Sixties to the mid-Eighties, the arts got used to the idea that the state would have a role in funding new work. What was seen as worthwhile was often anti-commercial, oppositional, experimental, and respectable businesses would not want to be associated with it, ran the train of thought. So the taxpayer should pay for what was deemed necessary for society's cultural health, as if the vast majority of taxpayers would be sympathetic or even interested.

In the United States, taxpayers tick a box on their annual tax return if they think $3 of their taxes should go to pay for the election campaigns of presidential candidates. Hardly anybody in the home of democracy ticks "yes". If we tried a similar scheme in the UK for public funding of the arts, the response would probably be about the same.

So the Arts Council built an edifice of committees of the Great and Good (Luvvies Section), informed by an unstable mix of backward-looking traditionalism and fashion-prone radicalism, on the vacuum where popular support should have been. But many in the arts resisted the advent of big-league business sponsorship on the grounds that it would be worse. It was the thin end of the wedge, it was argued. Companies would only support "safe" and unadventurous work, then they would try to censor what they sponsored. The next thing would be Hamlet coming on stage with the sponsor's name on the back of his jacket, or adding the words, "Brought to you by Bigco International" to the end of his soliloquies.

It has not happened. In the theatre and opera particularly, sponsorship has been the kiss of life, and on the whole tastefully done. Arts sponsorship is big business, and big companies clearly think it is good for business.

It is in the literary field that it all seems to be getting out of hand. Every big-name company seems to want its big name on a prize. One group of arts journalists was recently invited to discuss the subject by a public relations company carrying out research for a British multinational. Only after their tape-recorded discussion, for which they each received pounds 50 in a brown envelope, were they told the name of the client, which was thinking of sponsoring yet another cultural prize.

Other companies have not handled their public relations so forcefully. The NCR non-fiction prize last month descended into such farce that it is hard to think that anyone would want to buy a cash register from the company, let alone buy a book with the "NCR prizewinner" flash. The company admitted paying professional readers to sift through entries so that judges would only be asked to do a little light reading.

Some companies have been keen to take their names off prizes. The Orange prize was originally sponsored by Mitsubishi, which pulled out after Simon Jenkins had a go at female separatism in a Times column (the actual pounds 30,000 prize money comes from an elderly anonymous donor in the US). And some prizes have failed to generate any publicity. The IMPAC literary prize is the richest in Europe, worth pounds 100,000, but no one has heard of it - mainly, it seems, because the American management services company bases its European operation in Dublin. It was won this year by a Spaniard, Javier Marias.

Literary prizes have been devalued as credible judges are spread ever more thinly over the ground. There are tales of judges failing to take competitions seriously, of corruption, croneyism and hype. Prizes have become dates in a social "season"; rather than tests of literary merit.

So there is a good case for calling a halt to the circus. But before donning the hair shirt, let us remember that not everything ridiculous should be banned. At least these dinners give budding authors the chance to get out a little and rub shoulders with brewers, mobile-phone operators and agrochemical manufacturers in the real world.

But there is also a natural law about these things. Public and journalistic interest in the prizes caravan will subside, and what will remain will be the few prizes of real literary value. The Booker, founded in 1969 and strongly promoted for many years by Sir Michael Caine, Emma Nicholson's husband, certainly widens the appeal of new literature. The Whitbread prize, almost as long-established, has well-respected category awards for fiction, first novels, children's books, poetry and biography. These are worthwhile prizes because they persuade large numbers of people to read good books.

Businesses will also go on finding new ways of sponsoring new art. It may seem strange, but putting a David Hockney painting on the tail of a British Airways 747 is one way of bringing modern art to a wider audience.

Historically, arts patronage has always been a job for the private sector. Public funding should primarily be devoted to the arts that command public support ("the people's money for the people's priorities", as Labour's Lottery slogan has it). Of course, BA is unlikely to discover and promote talented new artists, but Charles Saatchi, Vivien Duffield and the Sainsbury family can do that. Business sponsorship, meanwhile, will bring good authors and artists to the attention of millions who might otherwise be inattentive. So let them all have prizes.