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But the popular-selling and controversial "The Slap" by Christos Tsiolkas did not make the cut for the 2010 Man Booker Prize shortlist, the judges said on Tuesday.
The other shortlisted authors are Howard Jacobson with "The Finkler Question," Damon Galgut with "In a Strange Room" and Tom McCarthy, who is among the bookmakers' favorites to win the prize with his critically acclaimed novel "C."
The winner of the 50,000 pound ($76,790) prize, which can catapult an unknown author to worldwide success, will be announced on October 12.
The judges, chaired by former Poet Laureate Sir Andrew Motion, had to whittle down a list of 13 previously selected books which the organizers said had achieved the best sales for a so-called "long list" since 2001.
Motion waxed lyrical about the talents of 67-year-old Carey, who could become the first author to win the prize three times with his novel "Parrot and Olivier in America."
"It's like being alive at the same time as Dickens," Motion told reporters at the unveiling of the short list in London. "I think he's that good."
BIZARRE FUSS
Carey won the 2001 Booker prize for "True History of the Kelly Gang" and was also successful in 1988 with "Oscar and Lucinda." He is one of just two authors to have won the award twice, the other being South African JM Coetzee.
Motion also praised Donoghue's "The Room" and "The Long Song," Levy's take on the life of a Jamaican slave in the 19th century as "extraordinarily ambitious."
He singled out McCarthy's critically acclaimed effort as a book of "outstanding range."
But "The Slap" -- a multi-award winning book about the punishment of a child at a family barbecue -- was the real shock omission, given its commercial success.
"What a bizarre fuss it was," Motion said, referring to the whirlwind of debate that engulfed the book.
Bookmakers were split over who will win the coveted prize. Ladbrokes have Donoghue as favorite at 9/4 with Carey second, while William Hill fancy McCarthy at 2/1.
The 2009 prize was awarded to Hilary Mantel for her historical novel "Wolf Hall," which depicted Henry VIII's court through the eyes of Thomas Cromwell.
Past winners of the prestigious competition, which aims to reward the best novel of the year written by a citizen of the Commonwealth or Ireland, include VS Naipaul, William Golding and Salman Rushdie.