Controversial India-born British author Salman Rushdie was knighted by the Queen Elizabeth on Wednesday for his "services to literature."

Muslims around the world had condemned the award when it was announced last year in the Monarch's Birthday Honours list.

The ceremony was held at Buckingham Palace.

Sir Rushdie, 61, who has written a number of acclaimed books, went into hiding in 1989 after the publication of his controversial book, The Satanic Verses.

The novel sparked widespread protests by Muslims and Iranian leader Ayatollah Khomeini issued a 'fatwa' against him, saying the book was a blasphemy against Islam and sentenced him to death.

After he was presented with the award, Rushdie said: "I'm very proud, very happy."

Asked whether he thought accepting the honour had undermined his credibility, he said: "I just think it's a great moment for anyone to have 35-odd years of work recognised in this way."

Rushdie explained he chose not to have footage of himself accepting the award from the Queen for no other reason other than it was a "private moment", BBC reported.

He also said he had no regrets writing The Satanic Verses, despite the problems that occurred.

"If you're lucky enough to have one book that gets into people's consciousness in that way then it's fortunate. The fact that that book, 27 years after it was published is still

interesting to people, I'm very proud of that. But I'm more interested in my more recent work really," Rushdie said.

In July Osama bin Laden's deputy, Ayman al-Zawahiri, threatened to retaliate against Britain if Rushdie was presented with this award.

Actor Sir Ian McKellen also attended the ceremony at Buckingham Palace to receive the companion of honour medal for services to drama and equality.

Rushdie first achieved fame with his second novel, Midnight's Children (1981), which won the Booker Prize. Much of his early fiction is set at least partly on the Indian subcontinent.