Interestingly, the decision to reinstate the award came in the wake of huge treasures discovered in secret vaults of the shrine and the temple, hitting headlines all over the world.
The award was instituted by the royal house in 1958 by depositing Rs 10,000 as endowment in the Reserve Bank. Since then 48 writers received the award, Academy secretary R Gopalakrishnan told PTI.
Initially, its cash component was Rs 250 but it was steadily increased to Rs 25,000 by making additional provision from the academy's award fund.
The award ran into controversy in 2007 when poet Kureeppuzha Sreekumar declined to accept it arguing that it went against his secular convictions to receive an honour bearing the name of the presiding deity of a temple.
The issue was then debated by the council of the Academy, presided by eminent novelist M Mukundan, who was an appointee of the previous LDF government, and decided to wind it up.
Recently,some Malayalam writers dubbed it as a ''fallacy'' to run down the endowment simply because it bore the title Lord Padmanabha.
Certain cultural quarters also pointed out that no Indian writer had ever rejected high literary honours like "Saraswathi Samman" because it is named after the Goddess of learning and art.
Taking note of the debate, Culture Minister K C Joseph last week asked the Academy to have a fresh look into the matter and made it clear that Congress-led UDF government did not agree with view that secularism would suffer if the award was resumed.
The recepients of the award included some of ardent Left supporters and rationalists like P T Bhaskara Panikker, M P Parameswaran and C G Santhakuamar.