A tragic traditional story has won the major prize at the first Indigenous Languages Story Writing Competition in Alice Springs in the Northern Territory.

Competition co-ordinator Conrad Tamblyn says competition has been fierce, with 80 entries from across the Territory, Western Australia and South Australia.

Ronny Wavehill, from Dagaragu, wrote a story in Gurindji called "Karu-kahn" (River Mermaid), about a man who can not keep his aquatic bride on land.

Another entry from the remote Victoria River community, also in Gurindji, won another major prize.

A group of 20 students from MacFarlane Primary school in Katherine won the junior school category for a series of humorous sketches written in creole.

Mr Tamblyn says the students' stories had the judges in stitches.

He says he expects a dramatic rise in entries next year.

"Some people hung off because they thought it was more for students," he said.

"One of the comments people were making at the awards ceremony was, next year we're going to put in a lot of entries from our community, not just one or two."