The author's comic novel Lost for Words has beaten Sebastian Faulks's authorised Wodehouse sequel to 'the only prize with a sense of humour'

The novelist Edward St Aubyn has shifted from parody into reality by winning the UK's only prize for comic fiction with a satire of literary awards, Lost for Words.

St Aubyn carried off the 2014 Wodehouse prize in the face of competition from a novel inspired by the award's guiding light. Though judges are tasked with finding the novel which best "captures the comic spirit" of PG Wodehouse, the panel passed over Sebastian Faulks – shortlisted for his authorised Wodehouse sequel Jeeves and the Wedding Bells – in favour of St Aubyn's "wonderfully funny send up of literary prizes and … contemporary cultural life".

Speaking in advance of the prize ceremony at the Hay festival, St Aubyn declared himself "delighted and grateful".

"The only thing I was sure of when I was writing this satire on literary prizes was that it wouldn't win any prizes. I was wrong," he said. "I had overlooked the one prize with a sense of humour."

Born from a period of reflection which St Aubyn imposed on himself after the third novel in his Melrose trilogy failed to make the Booker longlist in 2011 – a disappointment which the author assured the Guardian he was "not going to spend a lot of time thinking about" – Lost for Words imagines a literary award full to bursting with feckless judges and deluded authors. The chairman is an MP who wants to stand up for "ordinary readers" – echoing the 2011 Booker chair Stella Rimington's call for books with "readability" – a fellow judge is more interested in the length of a manuscript instead of its quality, while the novelist Sam Black thinks it "out of the question not to win. And it was out of the question to have thought that it was out of the question not to win."

The novel has divided critics, with the Guardian's Leo Robson finding it "reeking of sour grapes … and gruellingly unfunny", while Louise Jury, writing in the Independent, judged it "witty, [and] often excoriating".

"The challenge I set myself with Lost For Words was to see if I could enjoy writing," St Aubyn said. "In that, at least, I succeeded. The fact this novel has given pleasure to others – and in particular the judges of the Bollinger Everyman Wodehouse prize for comic fiction – is an encouragement for which I am delighted and grateful."

The 2014 Wodehouse prize judges were the broadcaster James Naughtie, Everyman's Library publisher David Campbell, and the Hay festival director, Peter Florence.

St Aubyn will be presented with a Gloucestershire Old Spot pig – to be named after his winning novel – the Everyman's Library edition of PG Wodehouse, and a selection of champagne. He joins a list of previous winners including Will Self, Gary Shteyngart and two-times victor Howard Jacobson.