Leeds City Gallery, in the North of England, is an imposingly austere, picture-book Victorian kind of place. Paintings by the Pre-Raphaelite artist William Holman Hunt and images by the painter Stanley Spencer adorn the walls. But walk in off the wintry streets of Yorkshire right now and there's something strange going on. Old women, tottering in to meet their friends in the famous Tiled Hall Cafe, prick up their ears and turn up their noses. Why? Because from a hidden alcove, punk rock is blasting through the gallery. This is the Northern Art Prize, a regional answer to the Turner Prize. And it's fantastic fun.
The man responsible for the punk is Matt Stokes, one of four artists shortlisted for the prize. On first glance his entry, These Are the Days, seems a rather straightforward video installation. A huge screen is split into two, with one film wheeling around a punk crowd at a skateboard venue and another featuring a punk band playing in what appears to be their front room. So far, so MTV. But the twist here is that the crowd isn't jumping around to the band's music. Instead the group is making music inspired by watching the footage of the skateboard scene - and yes, it does make more sense to watch it than to describe it. The song veers from quiet to loud as the crowd's intensity ebbs and flows, reversing the usual relationship between audience and performer. It's intriguing stuff, it's beautifully shot and it's a pretty good song, too.
Stokes's piece is also notable for where it was filmed. He didn't find a grungy skater park in Manchester or Liverpool. The band wasn't put together by his friends in Newcastle. It was a commission from an arts organisation in Austin, Texas. These artists might be based in the northern part of England, but their work is of international significance - proved by Pavel Büchler, the second finalist. Born in the former Czechoslovakia in 1952 and now living in Manchester, the artist has exhibited his frequently absurd installations in China, Holland and Spain. In Leeds, his work includes a diamond in an ashtray and two sharpened pencils that, stood on end, take on the presence of mini-skyscrapers. They are both tiny and successfully illustrate Büchler's point: that everyday items can be manipulated into something strange and meaningful. In fact, they work much better than his larger piece: Eclipse 2009 is a tongue-in-cheek take on Sir Arthur Eddington's 1919 photographs of an eclipse, but using basketballs as the sun. It's slightly bombastic and heavy handed.
Still, the success of the Northern Art Prize is that it revels in opposites. In the next room, Rachel Goodyear's intricate pencil drawings couldn't be more different to the huge, wall-filling spread of Eclipse 2009. Of all these artists, Goodyear probably doesn't need the exposure of winning the prize to further her art career: sales across the world prove that she's doing very well already. And it's easy to see why: on closer inspection, each drawing of a horse or deer or mermaid, has something wonderfully unsettling about it. The horse has hoofs branded all over its body; the mermaids are swimming through bloodied water. These images are incredibly simple, but each one seems to tell a dark fairy tale all of its own.
If Goodyear's work is the most traditionally "artistic" of the finalists, then the video artists Nick Crowe and Ian Rawlinson's works are what you might expect from an avant-garde Turner Prize list. In one darkened room, the duo stand in front of a camera for Twinkle. Each figure is digitally manipulated so their features stretch, shrink or sometimes disappear, a bit like a kaleidoscope. Another piece uses similar techniques, reflecting a decaying bunch of tulips back on itself so it appears to retreat into a bug-like form. Spending time gazing at both pieces reaps its own rewards - a bit like studying a Renaissance masterpiece rather than just idly looking at it.
Who will win? I hope it's Goodyear - rewarding such delicate work would prove that the Northern Art Prize is genuinely different and recognise that prize-winning art isn't all about the big and brash. But even if she doesn't, there is enough good work here to prove that some of the most interesting artists are working outside the world's capital cities. The Northern Art Prize is at Leeds City Gallery until February 21. The winning artist will be announced on January 21. www.northernartprize.org.uk.