A late gamble on Bob Dylan has sent the singer-songwriter soaring up the odds to become the fourth favourite to win the Nobel prize for literature on Thursday.

Ladbrokes said this morning that the unlikely contender's odds of landing the world's most prestigious literary award had tumbled from 100/1 to 10/1 over the last 24 hours following "a substantial gamble from clued-up literary fans". Dylan sits behind favourite Adonis, the Syrian poet, at 4/1, Swedish poet Tomas Tranströmer at 7/1 and Japanese novelist Haruki Murakami at 8/1.

For some years, Dylan has made a showing as an outside contender at the bookmaker's. And it is not the first literary prize he has been in contention for – nor even the first this week. The singer was nominated for the major $50,000 Neustadt international prize for literature earlier this summer, but missed out at the weekend to Indian-Canadian writer Rohinton Mistry.

Ladbrokes said it would have "a significant five-figure payout" on its hands if Dylan wins the Nobel on Thursday.

"We've seen enough activity from the right people to suggest Dylan now has a huge chance this year. If he doesn't make the shortlist at least there will be some seriously burnt fingers," said spokesman Alex Donohue. "As Dylan said, money doesn't talk, it swears. If he does the business there might be a few expletives from us as well."