Sir Salman Rushdie celebrates his 60th birthday today in familiar circumstances: he is once again the subject of death threats across the Islamic world.

Eighteen years after the Ayatollah Khomeini issued a fatwa calling on Muslims to kill him, a government minister in Pakistan said yesterday that Rushdie’s recent knighthood justified suicide bombing.

The question of blasphemy in The Satanic Verses, Rushdie’s 1988 tale of a prophet misled by the devil, remains a deeply sensitive issue in much of the Muslim world and the author’s inclusion in the Queen’s Birthday Honours last week has inflamed anti-British sentiment.

Gerald Butt, editor of the authoritative Middle East Economic Survey, told The Times: “It will be interpreted as an action calculated to goad Muslims at a time when the atmosphere is already very tense and Britain’s standing in the region is very low because of its involvement in Iraq and its lack of action in tackling the Palestine issue.”

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For nine years Salman Rushdie lived as a virtual prisoner, changing addresses constantly, and protected around the clock by British security at an estimated cost of £10 million

Michael Binyon

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Hardliners in Iran revived calls for his murder yesterday. Mehdi Kuchakzadeh, a Tehran MP, declared: “Rushdie died the moment the late Imam [Ayatollah Khomeini] issued the fatwa.”

The Organisation to Commemorate Martyrs of the Muslim World, a fringe hardline group, offered a reward of $150,000 (£75,000) to any successful assassin.

Forouz Rajaefar, the group’s secretary general, said: “The British and the supporters of the anti-Islam Salman Rushdie could rest assured that the writer’s nightmare will not end until the moment of his death and we will bestow kisses on the hands of whomsoever is able to execute this apostate.”

Effigies of Rushdie and the Queen were burnt in Pakistan, where presidential elections at the end of the year have destablised an already volatile political climate. Hundreds of protesters in Multan, Karachi and Lahore set fire to British flags and chanted “Death to Britain, death to Rushdie” and Islamist leaders called for nationwide protests after Friday prayers.

Ijaz-ul-Haq, the Religious Affairs Minister, told the assembly in Islamabad that the award of the knighthood excused suicide bombing. “If somebody has to attack by strapping bombs to his body to protect the honour of the Prophet then it is justified,” he said.

He later retracted his statement, explaining that he had intended to say that knighting Rushdie will foster extremism. “If someone blows himself up, he will consider himself justified. How can we fight terrorism when those who commit blasphemy are rewarded by the West? We demand an apology by the British government. Their action has hurt the sentiments of 1.5 billion Muslims."

Pakistan’s national assembly earlier unanimously passed a resolution condemning Rushdie’s knighthood, which it said would encourage “contempt” for the Prophet Muhammad.

Rushdie was forced to go into hiding for almost a decade after the Ayatollah Khomeini issued the death sentence over The Satanic Verses.

On Valentine’s Day in 1989 the spiritual figurehead of the Iranian revolution pronounced on Teheran radio that: “The author of The Satanic Verses, which is against Islam, the Prophet, the Koran, and all those involved in its publication who were aware of its content, are sentenced to death.”

In Britain, the subsequent hate campaign helped to politicise and radicalise a generation of young British Muslims. The taxpayer is believed to have spent more than £10 million protecting Rushdie.

Only Khomeini had the power officially to lift the fatwa and he died without doing so, but in 1998, the Iranian Foreign Minister promised his British counterpart, Robin Cook, that Iran would not implement it.

Gradually, Rushdie emerged back into the literary spotlight and in recent years has appeared at events in London and New York, where he now lives.

It is understood that when he is in this country, Rushdie continues to receive round-the-clock police protection.

Muhammad Ali Hosseini, Iran’s foreign affairs spokesman, said on Sunday that the knighthood “will definitely put the British officials in confrontation with Islamic societies. This act shows that insulting Islamic sacred values is not accidental. It is planned, organised, guided and supported by some Western countries.”