An Australian stand-up comedian whose poster shows him blacked up in a grass skirt with a bone through his nose was last night installed as the favourite for British comedy's biggest prize.

Brendon Burns's confrontational and highly theatrical show, So I Suppose This is Offensive Now, had become the must-have ticket at this year's Edinburgh Fringe, even before his inclusion yesterday on the shortlist for the Intelligent Finance Comedy Awards, formerly the Perrier Awards.

If the poster, which also depicts Burns nailed to a cross and writhing in a wheelchair, is brazenly provocative, critics and audiences have been impressed by the veteran comic's thoughtful attempts to examine the nature of prejudice in the show itself.

He does this while sporting facial hair "like a 1920s gay strongman", being massaged by his two "slutty dancers" and through bombastic assaults on everyone from pretty girls to the suicide bombers whom he ridicules for trying to convert Britons to Islam: "that's Britain, which has yet to convert to the metric system".

Burns's first nomination is reward for 11 years working his way up the Edinburgh pecking order.

"I'm the guy that's been around for so long that no one can begrudge me this," he said yesterday.

"I started in the corner of a pub, going out on the Royal Mile and earning every bum on every seat. All my closest friends and peers have been nominated ahead of me. I know it's passe to admit to but this means the world to me. I cried when I heard."

He said that most people have understood that he is not racist. His poster is designed to "take the piss out of people who don't think it's offensive" while the show attacks sanctimony and pig-headedness on the left and right.

Burns's nomination was widely anticipated, as was that of another Fringe veteran: Andrew Maxwell, an Irish bar stool raconteur hailed as the heir to Dave Allen.

The three other shortlisted comedians were more of a surprise.

Andrew Lawrence, who was nominated for Best Newcomer in 2006, offers an hour of poetic invective targeting Scotland ("a landfill of insuperable wretchedness"), chavs and his own red hair ("the colour of sexual rejection").

Ivan Brackenbury's Hospital Radio Roadshow features a spoof hospital DJ in thrall to the 1980s naffness of Steve Wright and Simon Bates, while Pappy's Fun Club are an offbeat sketch quartet who nearly didn't make it to Edinburgh at all after their venue was closed at the last minute.

Bookmakers William Hill have installed Burns as 2/1 favourite to win, followed by Lawrence at 5/2.