An anonymous Bay of Plenty person has donated $50,000 as a literary prize.

The winner of the inaugural Acorn Foundation Literary Award, a Bay charity, was announced last night and received what is understood to be New Zealand's richest writing prize.

The winner, Stephen Daisley, won for his novel Coming Rain was one of eight Ockham New Zealand Book Award Winners announced at Auckland Town Hall last night.

As a former shearer, farmer and soldier it was not until Mr Daisley, who wrote in his spare time, was in his 50s that he made a major break through with his novel Traitor.

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Coming Rain was his second novel, after Traitor won Australia's biggest literary price, the Prime Minister's Award for Fiction in 2011.

Acorn Foundation general manager Nicky Wilkins presented the award at the ceremony.

Ms Wilkins said the donor set up the fund to support their passion for literature and support the development of writers in New Zealand.

"Our generous donor passionately believes that great literature not only entertains but nourishes both the intellect and the imagination, and that these attributes are amply demonstrated in the best of New Zealand writing, but unfortunately have been poorly rewarded in the past."

"New Zealanders are avid readers, and have a huge appetite for good fiction. We also have some exceptional writers in this country, but for some reason we don't recognise that - only 5% of books read in New Zealand are by local authors," she said.

The Acorn Foundation Literary Prize now stood proudly alongside other top international literary awards including Australia's Miles Franklin award ($60,000) and the Man Booker prize (£50,000).