Carnegie shortlist includes Andy Mulligan’s controversial Trash

Controversially dropped from the Blue Peter prize lineup over its "unsuitability" for children, Andy Mulligan's story of children who live on a dump in a developing country, Trash, has been shortlisted for the UK's most prestigious award for children's literature, the Carnegie medal.

Judges for the Blue Peter prize initially chose Trash for their shortlist in 2010, but then decided that Mulligan's "scenes of violence and swearing" were unsuitable for younger readers. The Carnegie judges, however, a group of 12 children's librarians, have deemed Trash to be one of the best books of the year and have shortlisted it alongside seven other titles for the children's book award, in its 76th year, which has been won in the past by Arthur Ransome, Noel Streatfeild and Philippa Pearce.

Mulligan, who won the Guardian children's fiction prize for his latest novel Return to Ribblestrop, is up against former Carnegie medallists Patrick Ness, shortlisted for his story of a boy struggling with an ill mother and a monster in his garden, A Monster Calls, and David Almond's prequel to his much-loved Skellig, My Name is Mina. Australian Sonya Hartnett, a previous winner of the Guardian children's fiction prize who went on to take the world's most lucrative children's literature prize, the Astrid Lindgren award, is nominated for her story set during the second world war of three children on the run, The Midnight Zoo.

Four debut novels complete this year's Carnegie lineup, by Lissa Evans, Ali Lewis, Annabel Pitcher and Ruta Sepetys. Evans's Small Change for Stuart tells of 10-year-old Stuart's quest for his great uncle's lost magical workshop, Lewis's Everybody Jam of a boy struggling with his brother's death in the Australian outback, Pitcher's My Sister Lives on the Mantelpiece of a family torn apart by a terrorist attack and Sepetys's Between Shades of Grey of the deportation of a family to Siberia in 1941.

Chair of the judging panel Rachel Levy, Sutton's children's library services manager, said this year's field of children's novels was "exceptional". Although the books deal with everything from poverty to bereavement and corruption to tyranny, and take place in settings as diverse as outback Australia and wartime Siberia, all eight books "are ultimately about the beauty and hopefulness of life and all are beautifully written", she said.

Founded in 1936, the Carnegie medal comes with no cash prize but great prestige. The winner will be announced on 14 June, alongside the Kate Greenaway medal for children's illustrators. Contenders for this year's Kate Greenaway prize include former winners Catherine Rayner and Emily Gravett, as well as Rob Ryan, whose papercut illustrations brought Carol Ann Duffy's The Gift to life. And the shortlisting of Jim Kay's atmospheric images, created for A Monster Calls, mean Ness's novel is up for both the Greenaway and the Carnegie.