By Richard Hamilton BBC News, Cape Town

Mr Mandela recently announced his retirement from public life

The flame is on its way round the world from Sydney to Athens, where the games will be held in August.

The torch arrived in Cape Town on Saturday and was flown by helicopter to Robben Island where Mr Mandela spent 18 of his 27 years in jail.

Standing in front of his former cell, the world's most famous ex-prisoner held the torch that symbolises freedom.

'People proud'

Although he recently announced he was retiring from public life, the 85-year-old statesman made an exception to hold the Olympic torch.

He passed it on to his fellow Robben Island prisoner, Ahmed Kathrada, who passed it on to a runner; the athlete then did a lap of the island.

Cape Town lost out in a bid to hold the Olympic Games this time, so its people were proud to witness the torch being passed through its streets.

The flame will also be carried to the top of Table Mountain before descending to the city's town hall, where Mr Mandela gave his first speech after being released from prison in 1990.

More than 100 prominent South Africans are carrying the Olympic flame as part of the relay.

They include singer Miriam Makeba, disabled swimmer Natalie de Toit and footballer Lucas Radebe.

The Mayor of Cape Town, Nomaindia Mfeketo, will pass the torch on to a delegation from Brazil, who will fly it to Rio de Janeiro for the next leg of the relay.