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[CANNES] British director Ken Loach won the Palme d'Or top prize at Cannes Sunday for the second time in a decade with his moving drama "I, Daniel Blake" about the shame of poverty in austerity-hit Europe.
The award marked a major upset at the world's top film festival in favour of the left-wing director, who turns 80 next month and is known for shining a light on the downtrodden.
He beat runaway favourites including the rapturously received German comedy "Toni Erdmann" by Maren Ade, one of three female directors in competition, and US indie legend Jim Jarmusch's "Paterson" starring Adam Driver as a poetry-writing bus driver. Both left empty-handed.
Loach now joins an elite club of two-time victors at the French Riviera festival including Francis Ford Coppola and Emir Kusturica.
Loach slammed swingeing welfare cuts across Europe as he accepted the prize.
"We are in the grip of a project of austerity driven by ideas that we call neo-liberalism that brought us to near catastrophe," he said.
"It has led to billions of people in serious hardship and many millions struggling from Greece in the east to Spain in the west... while this has brought a tiny few immense wealth."
The runner-up Grand Prix award went to Canada's Xavier Dolan, 27, for his hot-tempered family drama "It's Only the End of the World" featuring a cast of A-list French stars which had been widely panned by critics.
Fighting back tears, Dolan said he now felt vindicated.
"The fight continues. I will keep making films all my life whether they are loved or not," he said.
Britain also claimed the third-place Jury prize, for Andrea Arnold's high-energy "American Honey" starring Shia LaBeouf in a tale of disadvantaged US youths selling magazines door-to-door.
All three top winners surprised critics.
"The jury managed to blindside virtually every punter with their choice of winner," wrote US trade magazine Variety.
French film magazine Cahiers du Cinema tweeted that it had been a "lovely competition ruined by a blind jury".
The best director prize was shared by Romania's Cristian Mungiu for his drama "Graduation" about the moral rot of corruption in a post-communist society, and France's Olivier Assayas for his supernatural thriller "Personal Shopper" with Hollywood phenomenon Kristen Stewart.
Philippine star Jaclyn Jose won best actress in Brillante Mendoza's "Ma' Rosa" as a mother selling drugs to survive who falls prey to corrupt police.
"She broke my heart", one of the jury members, French director Arnaud Desplechin, said, justifying the choice in what was widely seen as a vintage year for female performances.
Iran's Shahab Hosseini clinched best actor for Asghar Farhadi's taut moral drama "The Salesman", about a married couple thrown into turmoil after the wife is attacked in their home. Farhadi, whose 2011's "A Separation" won the best foreign language film Oscar, also scooped the screenplay honours.
Houda Benyamina's "Divines" about a young French teenage girl from a tough immigrant suburb got the nod for best first film, the Camera d'Or.
The nine-member jury was chaired by "Mad Max" director George Miller, who called the 12-day festival "one of the most intense experiences of my life".
Loach won Cannes' top prize exactly a decade ago for "The Wind That Shakes the Barley", about the war of independence in Ireland.
"I, Daniel Blake" moved many to tears at Cannes but drew mixed reviews.
It tells of a carpenter's Kafkaesque struggle to get benefits after suffering a heart attack and being told by doctors he can no longer work.
He finds himself in a Catch-22 situation when an invisible and oft-cited "decision-maker" rules he is too healthy for benefits.
Blake befriends a young single mother of two who is sanctioned for being late to the benefits centre, leaving her with no money for food.
"The most vulnerable people are told their poverty is their own fault," Loach told reporters during the festival.
Variety called it one of Loach's finest films, "a drama of tender devastation... and scalding and moving relevance".
"It's about something so much larger than bureaucratic cruelty... It captures a world - our world - in which the opportunity to thrive, or even just survive, is shrinking by the minute."
21 films were vying for the Palme d'Or, which can propel global distribution for its winner.