The shortlist of 12 albums was announced at London's Commonwealth Club, with Coldplay's debut Parachutes immediately installed as the bookmakers' favourite.
Other nominees include established dance act Leftfield for Rhythm and Stealth, garage pioneer MJ Cole and British/Asian crossover artist Nitin Sawhney.
Half of this year's hopefuls have been selected for their debut albums.
The shortlist encompasses a broad cross-section of styles ranging from dance to folk, but there is only one specialist classical record - Nicholas Maw's Violin Concerto.
Judges' chairman Simon Frith said: With no obvious trends and fewer huge acts dominating the music scene, it means a wide open year for the Technics Mercury Music Prize.
"Plus we have half a dozen debut albums, an unexpected swirl of guitars, strings and soulful singer/songwriters and a strong of people making exhilarating new music."
'Elegant songs'
The judging panel felt Ashcroft's Alone With Everybody "confirmed his status as a fine songwriter", while Coldplay were described as having "elegant songs, classic guitars and gorgeous singing".
Former James Taylor Quartet musician Sawhney is nominated for the critically-acclaimed Beyond Skin, which narrowly missed out on being nominated last year.
His other projects have included producing for Sir Paul McCartney, writing for the latest BBC Proms season and co-writing and starring in the comedy Goodness Gracious Me.
Surprise omissions from this year's list include Moloko's hotly-tipped Things To Make and Do, Gabrielle's Rise and Exterminator by Primal Scream.
Bookmakers make Coldplay the 3/1 favourites, with Ashcroft and Leftfield both 4/1. Maw and Kathryn Williams are the rank outsiders at 20/1.
The Mercury Music Prize will be awarded during a ceremony at the Grosvenor House Hotel in London's Park Lane on 12 September.
Full list of nominations below:
Coldplay - Parachutes
Death In Vegas - The Contino Sessions
The Delgados -The Great Eastern
Doves - Lost Souls
Leftfield - Rhythm and Stealth
Kathryn Williams - Little Black Numbers
Helicopter Girl - How To Steal The World
MJ Cole - Sincere
Richard Ashcroft - Alone With Everybody
Nitin Sawnhey - Beyond Skin
Nicholas Maw - Violin Concerto
Badly Drawn Boy - The Hour of Bewilderbeast