When British Sea Power's manager suddenly blurted out that he'd been lying to them last week, they immediately imagined the worst.

Bass player Neil Wilkson, aka Hamilton, laughs: "Dave, our manager, he'd been shifty all morning, getting phone calls and looking a bit pale. Then he got in the van, and said, 'I can't tell anyone else this, it's a secret... I've been lying to you'.

"We all feared the worst and thought he'd embezzled all our money or the record company had gone bust or something. But yeah, turned out to be the Mercury! I'd forgotten all about it this year!"

The "Mercury" is the prestigious Mercury Music Prize for which British Sea Power have just been shortlisted for their tour-de-force third album Do You Like Rock Music?

It's a whole new world to the off-kilter band. Neil says: "We had to go to London and do a press conference thing, that was pretty bizarre.
"You walk in a room and there's 50 photographers all (makes camera shutter noises] 'Look this way!' I'm not used to that.

"You just have to stay yourself in those situations... so I just end up kinda not saying a lot! It's interesting to see how the other world works."

It's been a long, word-of-mouth-fueled ascent for the band, the creative core of which are three childhood friends who grew up in and around Kendal, Cumbria.

Singer Yan (real name, Scott Wilkinson), his brother Neil, and drummer Wood (Matthew Wood) grew up wandering the lakes and fells and conceived their own off-piste approach to music.

Joined by keyboardist Noble (Martin Noble) and Abi Fry on strings, they relocated to Brighton - and launched British Sea Power.

This weekend, they are back in the Lakes for the third Kendal Calling festival, run by local promoters Andy Smith and Ben Robinson.

BSP headlined the first and play every year, helping it grow this year from a two day event to three, doubling capacity from 2,000 to 4,000 - and selling out for the first time.

Neil says: "Yeah, I'm pretty excited about that one. It's grown a lot in three years. Dizzee Rascal and the Super Furry Animals, that's pretty impressive.

"And we're local grown produce! The first one, it was pretty much us, we were the only band that anyone knew. I guess it helped it out, got it going.

"The guy who does it put us on in Kendal and other places as well so we've known him for a while. He's a good lad, Andy."

Neil grew up in the village of Natland, a couple of miles from Kendal.
He recalls: "I was in a band at school with Woody who's the drummer in British Sea Power now. I've always played with him since I was about 14.
"There was one called Arkham, that was me, Woody and these two metal guys with long hair. One of the metal guys used to sing Metallica - and I used to sing The Pixies.

"Woody, he was the town drummer really, he was in all the bands."

The two-year making of Do You Like Rock Music? began with Neil and Scott spotting a derelict water tower near Ispwich - and deciding it was perfect for songwriting. So they moved in.

Neil grins: "It was kind of scummy, but so big that it felt kinda like a church when the light came in. There were pigeons at the top. It's a case of setting off in the right direction rather than heading straight for a posh studio and hiring a posh producer, trying to work out how to do it yourself, it's the only way to learn.

"We're sensitive chaps, you know! We've always just done that, you know, go round looking for things we can use rather than having people telling you. It's better to find your own way. It makes an adventure out of it."

They rehearsed in a disused 19th century clifftop fort in Cornwall, Fort Tregantle. Neil says: "We were living in the old Army barracks, there's absolutely tons of beds there, enough for about 500 soldiers.
"You'd wander round and find doorways that lead into these strange rooms with old pool tables and pianos and stuff.

"Occasionally the Army would pop in and start doing some training, marching round the yard or bringing choppers in and stuff. It was pretty weird they let us in there."

They recorded in Montreal, in the least conventional studio they could find - belonging to former Arcade Fire drummer Howard Bilerman and God Speed You Black Emperor's Efrim Manuck.

Neil grins: "It was kinda how I'd like to set up a studio, just a dirty place, you know, a lot of junk, old microphones and all on tape. And they worked at night because Howard had to look after his baby in the day."

Last year they famously played Britain's highest pub, The Tan Hill Inn- and they enjoyed the tiny boozer on the Yorkshire Moors so much last year, they're back for a minifestival this year.

Neil says: "That came about from the guy in Kendal as well. These days, a lot of people just suggest things because we've got this reputation now so it makes it easier.

"That was perfect, middle of nowhere up on the Moors... with a sheep in the pub! If you've never stroked a sheep, that's the place for you."

* British Sea Power close Kendal Calling Festival on Sunday, August 3. Tickets are sold out.