They need a synopsis and the first three chapters delivered to any Waterstone's branch between July 15 and 31. Then a full manuscript must be available by September 30.
The winner will receive a publishing deal with Faber and Faber, and their book will be prominently displayed at the front of every Waterstone's store in the UK.
Since I don't live in the UK, the fun part of the Telegraph article is the writing advice from children's/YA authors Philip Pullman, Eoin Colfer, Anthony Horowitz, Louise Rennison, and others.
--Lose the parents, invent swear words, bond with your readers and make your character slightly older than your target age group.--
Pullman put it eloquently:
"...How many kids pestered bookshops and libraries, saying "We wish someone would write a book about Harry Potter! Why doesn't someone write the first Harry Potter book? We can't wait for it!"? Answer: none. It came out of nowhere, and no-one expected it at all.
"The moral is - Don't write what people tell you they want to read, because the truth is that people don't know what they want to read until someone writes it. Instead, write exactly what you want to write. It's not their job to think what books there ought to be, it's yours.