The Swedish Academy hailed "his cartography of structures of power" and "trenchant images of the individual's resistance, revolt, and defeat."

The 74-year-old has written more than 30 novels, plays and essays.

He is the first South American winner of the prize since 1982 when it went to Colombian Gabriel Garcia Marquez.

In the previous six years, the academy awarded the 10 million kronor (£938,000) prize to five Europeans and one Turk, sparking criticism that it was too Euro-centric.

The Swedish Academy's Peter Englund said Vargas Llosa was "a divinely gifted story-teller," whose writing touched the reader.

Englund added that the writer was in New York - where he is currently teaching at Princeton University - and was told by telephone that he had won the prize.

"He was very, very happy and very moved," Englund said.

The writer's international breakthrough came with the 1960s novel The Time of The Hero which built on his experiences at the Peruvian military academy, Leoncio Prado.

The book was considered controversial in his homeland and 1,000 copies were burnt publicly by officers from the academy.

Born in the town of Arequipa, Vargas Llosa took Spanish nationality in 1993 - three years after an unsuccessful bid for the Peruvian presidency.

In 1995, he was awarded the Cervantes Prize, the Spanish-speaking world's most distinguished literary honour.

His best-known works include Conversation In The Cathedral, The War of the End of the World and The Feast of the Goat.

Tags: Nobel prize, Mario Vargas Llosa