Sharon Stone has joined Lynch on the Cannes jury

Other developments in Cannes on Sunday included criticism from an Italian film-maker against his government for trying to suppress his documentary about violence at the Genoa G8 summit in 2001.

The 12-day festival is at its half-way stage, and stars including Leonardo DiCaprio, Cameron Diaz and Jack Nicholson are among the stars expected to attend in the coming week.

Lynch was given his award from the French Culture Minister, Jean-Jacques Aillagon.

"It's a way for France to show its admiration and its gratitude to him and at the same time highlight the exceptional relationship he has with the Cannes festival," M Aillagon said.

"The homage we are giving to David Lynch is an expression of our country's very strong conviction that cinema is something essential to culture."

Martin Scorsese and Leonardo DiCaprio are expected in Cannes

Lynch, 56, also won the best director award for Mulholland Drive at the 2001 festival, and is loved in France for his independent approach.

"Sometimes in life you are given some wonderful gifts," he said. "That's the case for me today and I am very honoured."

Another director, Marco Giusti, complained that the Italian government had tried to stop him using footage of violence at the Genoa summit, during which one protestor was killed by police.

"The images are really extremely violent, they can change the public's opinion about what happened at Genoa - that is why the government does not want them aired," Giusti said.

Pierce Brosnan turned up for a Bond party on Saturday

"Whatever format we have tried to show the pictures in, on film or on television, they have been blocked in one way or another."

One of the highlights of the fortnight is expected to come on Monday when DiCaprio and Diaz turn up to see a 20-minute preview of their new film, Gangs of New York, directed by Martin Scorsese.

It was originally expected to have been the festival's opening film, but its release has now been delayed until Christmas.

Much of the talk of Cannes on Sunday focused on a party to celebrate James Bond's new film, held at Pierre Cardin's futuristic home on Saturday.

It was hailed as the most spectacular bash of this year's festival, and the 1,200 guests were joined by 007 star Pierce Brosnan.