Andrea Levy, 48, was picked for her story about West Indian immigrants by a panel of judges that included the actor Hugh Grant and the bestselling author of Chocolat, Joanne Harris. They were captivated by Small Island, which they described as moving and humane.

Amid the current debate about immigration, her book is particularly topical. Small Island, her fourth novel, is a grim exploration of England’s past as the first wave of immigrants from Jamaica are shocked to discover that the mother country is racist.

It explores the experiences of thousands of Jamaicans who joined the Allied forces but found themselves unwelcome in Britain afterwards.

Levy, who grew up on a white council estate in North London in the 1960s, saw off competition from four other acclaimed writers, Susan Fletcher, John Guy, Michael Symmons Roberts and Geraldine McCaughrean — each Whitbread winners in their own categories of first novel, poetry, biography and children respectively. They were selected from an initial 450 entries.

Sir Trevor McDonald, the newscaster, who chaired the judges, said that Levy emerged as clear winner after a judging session that lasted two hours. He said: “It’s a brilliantly observed novel of a period of English history that many people seem not to know very much about. It’s about the West Indian diaspora — people who came here in the 1940s to fight for the mother country against the tyranny of Hitler’s Germany. It’s wonderfully observed, with a light touch.”

The choice was a popular one. Scott Pack, head buyer at Waterstones, said: “This is the first time an author has won both the Orange Prize and the Whitbread Book of the Year and clearly demonstrates the magnitude of Small Island. It really is one of the ‘must reads’ of the year.”

Accepting her prize, Ms Levy said: “I would like to thank those people in Britain who work hard to make sure the rivers in this country never run with blood, only water.”

The Whitbread awards were set up 32 years ago to celebrate “the most enjoyable British writing of the past year”.

Levy, the child of parents who sailed from the Caribbean in the first optimistic, postwar wave of immigrants, is following the footsteps of the late Ted Hughes, among other winners.

Although she has recalled being “too busy sitting in the toilets talking about boys” at school, the combination of a second-generation immigrant and British working-class perspective in her writing has led to her being compared to British Asian writers such as Hanif Kureishi and Meera Syal, as well as novelists such as Roddy Doyle and Nick Hornby.

She took a course in writing before making her name, although Small Island is being hailed as her breakthrough novel. It took her 4½ years and hours of research through archives and at the RAF and Imperial War Museums.

In just a few months, she went from being the 7-1 outsider to win the Orange Prize for fiction to being the bookies’ favourite for the Whitbread after she beat such literary grandes dames as Rose Tremain, Margaret Atwood and Gillian Slovo to win the Orange Prize.

She then won the Whitbread novel award against heavyweights such as the 2004 Booker winner, Alan Hollinghurst, and Louis de Bernières.

Some critics have described Small Island as a savage indictment of race relations, but Levy insists that none of her books are just about race: “They’re about people and history.”

Winning both the category awards and the main prize can have a dramatic effect on sales.

Last year’s Book of the Year, The Curious Incident of the Dog in the Night-Time by Mark Haddon, was selling about 5,000 copies a month before winning the Best Novel award. Afterwards, it sold more than 40,000 copies a month.

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