Labour's Lord Ahmed expressed surprise at the decision to give a knighthood to Rushdie, who was placed under a fatwa, or death sentence, by Iranian leader Ayatollah Khomeini 18 years ago after the publication of the allegedly blasphemous The Satanic Verses.

"I was appalled to hear Salman Rushdie had been given a knighthood," Lord Ahmed said.

"Two weeks ago the Prime Minister was calling for building relations between the Muslim world and Britain, then suddenly this knighthood is given to a man who has not only been abusive to Muslims, but also to Christians - because he used abusive language towards Jesus Christ."

He said whoever had made the decision had made Gordon Brown's job very difficult as he takes over as Prime Minister.

"The confidence that was being built within Britain with inter-faith work and community cohesion work has once again been damaged because of this provocative decision.

"This man not only provoked violence around the world because of his writings, but there were many people who were killed around the world.

"Forgiving and forgetting is one thing, but honouring the man who has blood on his hands, sort of, because of what he did, I think is going a bit too far."