The word "slut" appears in the first line of Margo Lanagan's new book, Tender Morsels. The next few paragraphs describe an unsettling sex scene between a witch and a dwarf. For some parents this will simply be an upfront way of indicating the challenging content of an interesting novel for young people, for others it will signal the end of children's literature.

The novel, published this month by Random House, is a lurid reworking of Grimm's Snow White and Rose Red fairytale and also contains a gang rape and a frank description of a miscarriage. Within the book industry, the new title from the Australian author is already being described as uncompromising and controversial.

Publication of Tender Morsels in this country is leading to renewed calls for a clearer system to let parents know about the nature of the books that their children are reading. Anne Fine, a former children's laureate, said: "If you look at online reviews, nearly all the parents think it is quite unsuitable. Many of the children loved the book but among the girls, a lot of them found it frightening or even repulsive.

"I have to wonder generally whether a children's publisher does not sometimes have a responsibility to stop and say that although a shocking new book will make money, and even be popular, it does not have what the Americans call 'redeeming social importance'."

Philip Pullman, author of the His Dark Materials trilogy, believes the front of a book should offer a good clue to the buyer. "Book covers can tell you a lot," he said. "A book with a cover illustration by Nick Sharratt, who does many of Jacqueline Wilson's covers, tells you a lot about what is inside, while a book cover by Ian Beck, one of my favourites, tells you this is a different kind of book."

Designers at Random House have given Lanagan's novel one cover illustration for younger readers, while another has been chosen for the adult edition being published by Jonathan Cape. Pullman feels the mysterious cover portrait picked for a young audience is likely to draw readers in without giving much information. He does not believe, though, that children's writers should steer clear of tough material.

"I don't think there should be areas that children's books can't deal with. Why should there be, given that children are likely to encounter much stronger subjects in real life, ranging from divorce - which once used to be something terrible and awful that you must not talk about - to drug trafficking and sex?"

For Pullman, calls for censorship or for an age-related classification system are not the answer. "This idea comes from a misguided fear and a murky sense of nostalgia about the way books used to be."

David Fickling, the publisher of Tender Morsels, says he knows the content will be unpalatable to some readers and so there is a warning on the inside of the jacket. He defends Lanagan's gang rape scene because it is couched in a moral context. "I cannot believe anybody could read the gang rape scene and not be horrified. Terrible things are out there in the world. And in the real world they tumble into children's lives in an unexplained way - items on the news, like the [Jamie] Bulger case or killings in Helmand."

Michael Rosen, the former children's laureate, suspects that age guidelines would be pointless. "If you have a book in a house that says it is for a nine-year-old, is that going to stop an eight-year-old picking it up?" he asked. "A book is a public place and you can't control it. That is why we call it the republic of letters. It was the Puritans who were worried about people's private desires. Attempts to control reading are the last tendrils of puritanism."