The T.S. Eliot Prize for 1996 was awarded in January, in absentia, to the Australian poet Les Murray, one of our most regular contributors, for his book Subhuman Redneck Poems. The choice was generally a popular one. 'Murray is not a household name,' we were told by a journalist seeking an angle on him for the Telegraph. 'I understand he's very large.' Few poets are household names, but Murray's readings in Britain and Ireland, his contributions to radio and television, his salutary political particularism at home and abroad, make him a bracing, sometimes an abrasive, presence. He is, yes, outspoken; he is not modest about what poetry is or what it can do. For a writer not from these islands he must be among the best known here. 'I understand,' the journalist continued, 'that he wants a republic in Australia.' That I understand again! To understand Murray's republicanism would be to understand the inspiriting difference of his Australian world and there just isn't time for that. Better to apply familiar templates to the unfamiliar.

A devout Roman Catholic, Murray's Christ is vigorous and just, and the moral rigour of the Old Testament still mean to Murray. His satires and Jeremiads, especially those addressed to his own country in its political, cultural and environmental compromises, are unattenuated. In a largely urban, secular culture he is a rural and religious individual, his books dedicated to the glory of God and his voice to the profanum volgum. He is a precious anachronism: insistently democratic, anti-nationalist, anti-elitist, and most of all, hostile to the reductive ironies by which so much of our poetry world seems to live. He is also a learned man and technically one of the most resourceful poets of our time.

The verdict of the Eliot Prize judges was, according to the chairman Andrew Motion, unanimous. The ghost of Eliot will have been gratified that a Christian poet has been so honoured, but there is an irony: the eloquent anti-Modernist bears off the coveted Modernist laurel. In April on the South Bank Les Murray and Mrs Valerie Eliot will sit down to lunch.

The occasion of the award was exploited for other ends by one of the short-listed poets, Adrian Mitchell. Taking a line quite contrary to Murray's in Australia, Mitchell launched a strident attack on the Arts Council for not supporting poetry. His shortlisted book Blue Coffee Poems 1985-1996 is published with public subsidy. It is a Poetry Book Society Choice, and the Poetry Book Society too is subsidised by the Arts Council. He has been a recipient of Arts Council bursaries and many - most? - of the readings and performances he gives are subsidised directly and indirectly by Arts Councils. In his view - articulated on Newsnight and widely in the press - such support hardly counts; he certainly did not mention it. He did insist that he was protesting not on his own behalf but for all those poor souls who find the climb up the north face of Parnassus a wearying business.

The Arts Council ought to provide regular stipends for poets. He called as witnesses Hugh MacDiarmid and Basil Bunting, whose declining years were spent in hardship, and to whom the State had 'a duty' and 'a responsibility'. It's doubtful that Basil Bunting or Hugh MacDiarmid would have seen it that way or relished receiving a pension from a Conservative government, even if the largess was administered at arm's length by an Arts Council. Dependence might have seemed to them tacitly to compromise their art and to amount to complicity. It is enough that Briggflats was published by a subsidised imprint, that MacDiarmid's collected works are coming from another. There are poets -more perhaps than is generally realised - who rightly receive Civil List pensions. There should be a flexible mechanism for helping writers like Paul Potts, Brian Higgins, J.C. Squire and others who have done the Republic of Letters service but have fallen on impossible times. But a salary for young writers, as a right?

The problem, not justly resolved in old Eastern Europe with its investment in approved culture, or in Western Europe where schemes have been implemented, is a practical one of administration: who, how many, how much, for how long? There is a more pressing question of principles. Why? Would dissenting voices be listened to if their dissent was subsidised by the establishment from which they dissent? This repressive tolerance (we used those terms in the 1960s and they retain a certain resonance) is a form of assimilation and potentially of compulsion. Would any of the poets in our tradition who has a day job have been markedly better as writers or as individuals if they had been free to lie in every morning? Chaucer, or Milton, or Stevens, or Eliot himself? Cannot subsidy violate the essential connection between writer and reader, the individual who spends money on a book or a reading?

If a modern state has a duty to the arts, it is in making them as widely and cheaply available as possible. The original policy of the Arts Council was to insist that its clients keep prices low, making new and experimental work affordable. The emergence of writers' bursaries was controversial, and not only with those who, like Auberon Waugh, feel that all subsidy is tainted and tainting (though patronage is another mater). Bursaries were justified as project-related, allowing a writer to 'buy time' for specific purposes. The problem of appraisal remains complex, but many writers, and therefore readers, have benefited from such bursaries which, unlike prizes, fuel work in progress rather than rewarding work done.

What is Adrian Mitchell's constituency? Who does he speak for? 'Ever since Out Loud in 1968, Adrian Mitchell has been one of Europe's bestselling poets', the blurb of his new book declares. 'His most nakedly political poems… have become part of the folklore of the Left.' What writer of the Left, at this time of day, would seek the status of civil servant? In the late 1960s, on a visit to Havana, Gabriel García Márquez declared: 'We must expropriate the Word in the same way that we have expropriated the petroleum industry.' The best way to do this, as the Havana government had already discovered, is to nationalise poetry by controlling the means of production, the poets themselves.