Scotland's most prestigious literary award has been saved by a new sponsor - the hotel and leisure chain Stakis.

The Glasgow-based company will disclose next Wednesday that it is to take over the running of what was called the McVitie's Scottish Writer Of The Year. The announcement will be made at a dinner at Dunblane Hydro, one of Stakis's premier hotels.

The award had been thrown in doubt after McVitie's ended its association with it just two months before this year's event was due to be launched.

McVitie's had sponsored the award for the last ten years and last year's winner, Alan Spence, was awarded the top prize of #10,000 for his short-story collection, Stone Garden and Other Stories.

In 1990, the award was won by poet and champion of the Gaelic language, the late Sorley Maclean, for his collected poems in a bilingual edition with his own translations from the Gaelic originals.

No formal reason was given for the company's decision to drop its association with the prize, but many insiders believed it was taken because McVitie's felt its investment was seen as wasted and the company's involvement was increasingly becoming seen as embarrassing rather than prestigious.

It was also believed that when Sir Charles Fraser, the Edinburgh-based businessman and vice-chairman of McVitie's parent company United Biscuits, retired he left the way clear for the company to sever its links with the Scottish literary world.

Unease had crept into the relationship between the sponsor and the more conservative book world when the actress Jane Asher announced the shortlist at a ceremony in Edinburgh.

Her speech was peppered with references to the sponsor's products, inducing hilarity in the audience.

Even Alan Spence caused the organisers of the McVitie's prize acute embarrassment several years before the award was bestowed on him.

In 1990 he stormed out of the ceremony when McVitie's decided to stage the evening as a horse race, with the odds calculated by Ladbrokes and chalked up for the benefit of the cameras on a blackboard.

Yet last year Mr Spence happily lauded the prize saying: ''It is such a lot of money to get your hands on at once. It buys you time to get on with your work. It is a major boost to any writer's career.''

Entries for the McVitie's Prize were invited from writers born or living in Scotland and those who have Scottish parents or who have taken their inspiration from Scotland.

Unlike some other literary awards, the winner was chosen without any public wringing of hands by the judges - prompting some cynics to suggest that its calm and calculated image failed to garner the high profile publicity more fiery competition such as the Booker attracts every year.

One commentator said last night: ''The McVitie's was a literary event rather than a fashionable, glamorous television gathering. It was also a prestigious event as far as the writers were concerned.''

Last night the hotel chain refused to confirm it is to take over the sponsorship of the award, but did not deny it planned to make an announcement next week. It has not been disclosed how long the new sponsorship deal will run or how much prize money will be on offer.

McVitie's announced last month that it was pulling out of its sponsorship deal after ten years.

Caroline Kinsey, for the company, said it was felt ''it was an appropriate time to end their commitment.''