LONDON (REUTERS).- Iraq-born Zaha Hadid has won Britain's main architecture prize for a second year running with her design for a futuristic Z-shaped school in London, unexpectedly beating the 2012 Olympic Games cycling arena.

The Royal Institute of British Architects' judges awarded the 20,000-pound prize to Hadid for the Evelyn Grace Academy, a new school in south London which they described as a "highly stylized zig-zag of steel and glass".

The London-based architect won last year's competition for a modern art gallery in Rome and also designed the swimming pool complex for the 2012 Games. Her latest design has a bright red running track that cuts under the school building.

"It is what every school should and could be," said RIBA President Angela Brady. "The unique design, expertly inserted into an extremely tight site, celebrates the school's sports specialism throughout its fabric."

The favourite for this year's award was another London Olympics building, the 6,000-seat velodrome that has become known as the "Pringle" due to its distinctive saddle-shaped roof. Others on the shortlist were the Museum Folkwang in Essen, Germany, and the new Royal Shakespeare Theatre in central England.

The annual prize is named after Scottish architect James Stirling and is open to all buildings in the European Union designed by practices based in Britain.

Previous winners include the "Gherkin" tower in the City of London (2004), the fourth terminal at Madrid-Barajas Airport (2006) and the Stuttgart music school (1997).

(Reporting by Peter Griffiths; Editing by Karolina Tagaris)