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(Adds details) STOCKHOLM, Oct 11 (Reuters) - Chinese writer Mo Yan won the2012 Nobel prize for literature on Thursday for works whichcombine "hallucinatory realism" with folk

tales, history andcontemporary life grounded in his native land. The prize, awarded by the Swedish Academy, is worth 8million crowns ($1.2 million). Mo, who grew up in Gaomi in Shandong

province in thenortheast of the country and whose parents were farmers, setshis works mainly in China. "He has such a damn unique way of writing. If you read halfa page of Mo Yan you

immediately recognise it as him," saidPeter Englund, head of the Academy. He said Mo had been told of the award. Mo Yan is a pen namewhich means "Don't speak". His real

name is Guan Moye. "He was at home with his dad. He said he was overjoyed andterrified," Englund told Swedish television. The award citation said Mo used a mixture of fantasy

andreality, historical and social perspectives to create a worldwhich was reminiscent of the writings of William Faulkner andGabriel Garcia Marquez. At the same time, he found a

"departure point in old Chineseliterature and in oral tradition", the Academy said. Mo is best known in the West for "Red Sorghum", whichportrayed the hardships endured

by farmers in the early years ofcommunist rule. His titles also include "Big Breasts and WideHips" and "The Republic of Wine". The literature prize is the fourth of this

year's crop ofprizes, which were established in the will of Swedish dynamiteinventor Alfred Nobel and awarded for the first time in 1901. The writer was one of the favourites to win the

award thisyear, according to British bookmaker Ladbrokes, along withJapanese author Haruki Murakami. ($1 = 6.5846 Swedish crowns) (Reporting by Johan Ahlander, Simon Johnson, Anna

Ringstrom,writing by Patrick Lannin, editing by Alistair Scrutton andGiles Elgood) (([email protected])(+46 70721 1110)(ReutersMessaging:

[email protected])) Keywords: NOBELS LITERATURE/