A controversial replica of peace campaigner Brian Haw's Iraq war protest has been nominated for this year's Turner Prize.

Stage Britain, by artist Mark Wallinger, is a meticulous reconstruction of more than 600 weather-beaten banners, flags and placards erected in Parliament Square.

Essex-born Wallinger was shortlisted for the prize along with Zarina Bhimji, Mike Nelson and Nathan Coley.

Bhimji was shortlisted for her photographs of Uganda, from where she was exiled under Idi Amin.

Nelson will be judged on his Double coop displacement installation, which features a structure made of wood and chicken wire.

Coley specialises in cardboard models of religious buildings, painted in gaudy stripes similar to a circus big top.

The shortlist was announced at Tate Liverpool, which will stage the Turner Prize exhibition in October, and where the prize will be awarded in December.

The prestigious event was moved to Liverpool from London as a curtain-raiser for the city's Capital of Culture year in 2008.

The announcement, which was broadcast live in London for arts journalists who did not want to travel north, was led by Christoph Grunenberg, the director of Tate Liverpool and chairman of the five-strong jury.

He was accompanied by two jurors - journalist Miranda Sawyer and art critic Michael Bracewell.

Mr Bracewell described Wallinger's State Britain as "a work of incredible, epic proportion" which "puts you right in the gravitational field and the emotional field of the loneliness of protest".

He said of Bhimji: "Her subject matter is the place that she left, her homeland.

"She photographs it and films it in a way that somehow manages to balance the deeply romantic imagery with a strong sense of portent, of disquiet, of melancholy."

Ms Sawyer described Nelson's "claustrophobic" work as something which engages art experts and novices alike.

She said of Double coop displacement: "If you walk into it as someone who doesn't know about art, you are still engaged in the work, but if you get the art references, there are extra levels to the work."

She said Coley's Camouflage Church and Camouflage Mosque pieces, and his neon sign declaring "There will be no miracles here", were references to the ongoing conflict between religious and state authorities.

She said of the neon sign, which references a similar order made in 17th-century France: "This makes you think about the struggle between church and State, and how the State is telling us not to be religious."

Mr Bracewell said the political nature of the four shortlisted artists was coincidental.

He said: "It wasn't our intention to create a political list. It was an exceptionally strong year and we considered greatly different artists.

"It just happened that these artists made the strongest impact."

Mr Grunenberg denied that London was the natural home of modern art, and said the decision to stage the prize in Liverpool was "an important statement" by Tate.

He said: "Modern artists live across the country. Nathan Coley, for example, lives in Dundee.

"I think it is really important to spark a debate about contemporary art and that is why it is an important statement by Tate to hold this year's Turner Prize in Liverpool."

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