Sir Salman Rushdie told of his "great surprise and delight" as he was elevated to a Companion of Honour for his services to literature.
The Satanic Verses author was one of three additions to the Order of the Companions of Honour, which is limited to just 65 people at a time. He was joined by Sir Quentin Blake, the illustrator, and Dame Marina Warner, the historian and novelist.
They are named in the Queen’s Birthday Honours list among a host of famous names, including Damian Lewis, Pauline Quirke, Clare Balding and Stella McCartney.
Sir Salman, 74 - who spent nine years in hiding after Iran’s Ayatollah Khomeini called for his assassination in 1989 - said it was “an extraordinary honour” to be made a member of the Order, which was founded in 1917 by George V.
He said: “It's a privilege to be included in such illustrious company, both past and present."
Other current members of the Order include Sir David Attenborough, Sir Elton John, David Hockney, Sir John Major, George Osborne and Sir Paul McCartney.
Appointments go to those who have made a long-standing contribution to arts, science, medicine or government.
Sir Salman worked as an advertising copywriter and came up with the famous cream cakes slogan "naughty but nice", before beginning his writing career in the 1970s. He had two unsuccessful books before Midnight's Children, about the birth of India, which won the Booker Prize in 1981.
Sir Quentin Blake said joining the Order at the age of 89 means he will set about new projects with "renewed effort and enthusiasm".
He said: "Of course it is an enormous privilege but it is also of special interest to me because it is not, unlike so many awards, just a medal that is pinned on you.
“On the one hand, it acknowledges what you have done previously, but on the other looks forward to what you are going to do in the future.”
Sir Quentin is best known for his lengthy collaboration with Roald Dahl, the author, beginning with his illustrations for The Enormous Crocodile in 1978. He went on to illustrate children's classics including Matilda, The BFG and The Twits. He has written and illustrated more than 500 books.
Host of celebrities honoured
Ian Rankin, author of the Inspector Rebus novels and winner of several national and international awards, is knighted for services to literature and charity.
The 62-year-old novelist, who has penned 26 books featuring the troubled police detective, said he is unsure what his character would make of the award.
The best-selling crime writer joked it may not "may not make writing my next book any easier" and said Rebus would probably tell him “not to get too big-headed”.
Damian Lewis, 51, best known for his role in the television series Homeland, is made a CBE for services to drama and charity, a year after he lost his wife Helen McCrory to cancer.
Clare Balding, 51, the sports presenter, said it was "overwhelming to be recognised for doing things I enjoy so much", as she was made a CBE.
Stella McCartney, 50, who launched her own fashion label in 2001, is also made a CBE, while John Torode and Gregg Wallace, the MasterChef presenters, are made MBEs for services to food and charity.
Wallace said: "From a council estate in Peckham to being recognised by the Queen is for me something akin to a fairytale story. I am incredibly, incredibly proud."
Others to be made an MBE include Pauline Quirke, the Birds of a Feather star, Helen Worth, the Coronation Street stalwart who has played Gail Platt since 1974, and Andrew Onwubulu, the actor and rapper better known as Rapman.
Bonnie Tyler, the Welsh pop singer who became a worldwide star in the 1980s with hits including Total Eclipse of the Heart and Holding Out for a Hero, is made an MBE for services to music.
Born Gaynor Hopkins in Neath, the husky-voiced 70-year-old has had a career spanning five decades since first being spotted by a talent scout in 1974, when she was performing in pubs and clubs in South Wales.
She has sold more than 20 million records worldwide and represented the UK in Eurovision in 2013.
MP knighted days after criticism of Boris Johnson
Jeremy Wright, the former attorney general, has been knighted for services to politics - two days after he called on Boris Johnson to resign.
The Conservative MP became one of the most senior figures to turn on the Prime Minister, saying that partygate had done “lasting damage” to the Tories.
Sir Jeremy will have been aware that his knighthood, approved by Mr Johnson, was about to be announced when he made the comments. Recipients are told of their honours several weeks in advance, a fact that will not have gone unnoticed in Downing Street.
Sir Jeremy, who served as culture secretary for a year under Theresa May, spent four years as attorney general after being appointed to the job by David Cameron.
On his website, he said that partygate had damaged not only the reputation of the Government but also “the institutions and authority of government more generally”. He has not said whether he has submitted a letter of no confidence in the Prime Minister.
Knighthoods are also awarded to two men caught up in the Greensill Capital lobbying controversy.
Nigel Boardman, the solicitor whose official report into the affair was described as a “whitewash” by Labour, becomes Sir Nigel. Charles Roxburgh, the second permanent secretary at the Treasury who admitted to nine meetings with the financial services firm before it collapsed, becomes Sir Charles.
Also among those named in the Queen’s Birthday Honours is Arlene Foster, the former first minister of Northern Ireland, who is granted a damehood.
Dame Arlene, the former DUP leader, said she was “surprised and delighted” by the news.
She said: “As a big royalist, it's a huge honour to receive this damehood in the 70th year of Her Majesty's reign.” On whether she expects people to call her by her new title, she said: "I'll always be Arlene from Fermanagh."
Maria Miller, the Conservative MP for Basingstoke and former culture secretary, is also made a dame, along with Nia Griffith, the Labour MP for Llanelli who is the shadow minister for international trade.
Stephen Timms, the Labour MP for East Ham and former chief secretary to the Treasury, is knighted.
Tracey Crouch, the Tory MP for Chatham and Aylesford, who chaired a fan-led review into English football and who beat breast cancer last year, has been made a CBE. Fellow Conservatives Chris Skidmore, who represents Kingswood and David Harris, the former MP for St Ives, have both been made an OBE.
Several UK officials who worked in Afghanistan at the time of the evacuation of British nationals from Kabul also have been included in the list.
Dr Martin Longden, former charge d'affaires of the UK Mission to Afghanistan, is being made a Companion of the Order of St Michael and St George, after spending two weeks in Kabul in August last year following the Taliban takeover.
Alexander Pinfield, deputy ambassador to the British Embassy in Kabul, who was working in Afghanistan until October 2021, has been made an OBE.
Others to be honoured include Andrew McCoubrey, development director at the embassy, Katrina Johnson, consul general at the embassy, Jason Oliver, senior overseas manager at the embassy, and Gemma Paolucci, the embassy's head of the counter-terrorism.
Chief Constable Iain Livingstone, the head of Police Scotland, said he was “deeply honoured and extremely grateful” after he was awarded a knighthood.
Earlier this month, the police chief ruled himself out of applying for the head of the Metropolitan Police following Cressida Dick’s departure last February.
GB curling team lead honours for sport stars
Eve Muirhead, who led Great Britain’s female curling team to gold at the Winter Olympics in February, is among a distinguished list of sports stars recognised in the Queen’s Birthday Honours.
The 32-year-old, from Perth, masterminded Team GB’s only gold of the games and is made an OBE for her efforts. Jennifer Dodds, Hailey Duff, Mili Smith and Victoria Wright, Muirhead’s teammates, are each made an MBE.
Gareth Bale, the five-time Champions League winner and Wales winger, and James Milner, the Liverpool footballer, are both made an MBE. Rio Ferdinand, the ex-Manchester United defender, becomes an OBE.
Moeen Ali, the England cricketer who is being made an OBE, said: “More than anything, I know it makes my parents happy."
Brynmor Williams, who has the rare distinction of having represented his country in three different sports, is made an MBE.
Williams, 70, played both rugby union and rugby league for Wales and also represented his country in athletics.
The former scrum-half has been a television and radio pundit for the BBC in both English and Welsh languages for more than 30 years.