Image caption The xx said they had had a "remarkable" year

The xx have won this year's Mercury Prize for their debut album xx.

The London-based three-piece formed in 2005 and released their record in August last year.

The trio beat competiton from 11 other shortlisted acts including favourite Paul Weller, Biffy Clyro and Dizzee Rascal to win the £20,000 prize.

Accepting the prize on stage, frontman Oliver Sim said: "I don't know what we were expecting but we weren't expecting this."

He added: "Thank you so much. We've had the most incredible year and it has just felt like every day we've just woken up to something incredible we just weren't expecting.

"It has felt just like a haze. Being here is like a moment of clarity in all that's happening."

Image caption Paul Weller had been favourite to win the prize

He revealed that he thought Wild Beasts or Laura Marling would have won because "they performed so incredibly."

When asked what he would spend the prize money on, Sim said he had no idea, but bandmate Romy Croft suggested a new studio could be on the cards.

"We made this album in a converted garage the size of a bathroom," she said.

BBC Radio 1 DJ Jo Whiley said they were worthy winners, adding: "To say they were the obvious choice would be unfair. They were the one band everyone has been talking about."

Head of judges Simon Frith said it was "a record of its time".

He said: "It's a very urban record, it is part of that urban soundscape when no-one has any idea what is going to happen next."

Twelve judges

The band had been favourite to scoop the prize, but a flurry of bets put on at William Hill on Monday, prompted the bookmaker to slash Paul Weller's odds to favourite.

The xx went to the same school in Putney, south west London.

Image caption Laura Marling has been nominated twice for the prize

Previous Mercury nominees Hot Chip and Burial also attended Elliott School in recent years, as did a member of Basquiat Strings.

But speaking before the event, Sim said the school had not played that much of a big part in their musical career.

"I don't want to give them too much credit because technically they just neglected us.

"There was so much time to do our own thing and they gave us a room to hang out in during breaktime and gave us time to figure thing out for ourselves, which worked quite well for us because I always find it hard being taught something creative.

"I only got introduced to Hot Chip and Burial when I left. The school's claim to fame was Pierce Brosnan."

The Mercury Prize was founded in 1992 to reward what a panel of 12 judges think has been the best album of the past year.

Previous winners have included Elbow, Arctic Monkeys and Klaxons and all those bands saw a rise in album sales.

"This is is a popular choice within the industry and probably the album that will go on to sell the most of any of the nominees by winning," said HMV spokesman Gennaro Castaldo.

"It's enjoyed great word-of-mouth since its release with respectable sales and with the Mercury prize now lighting the touchpaper, we expect demand to rocket."

However, last year's winner Speech Debelle found sales for her winning album - Speech Therapy - disappointing and she eventually left her record label blaming it for poor distribution.

Prior to her win, the album had sold around 3,000 copies with sales increasing to just below 10,000 in November last year.