Media-shy Mr Coetzee did not attend the ceremony

India was the first place to ban The Satanic Verses, and the authorities had been reluctant to give him a visa for many years.

That all changed last year, and Mr Rushdie's visit coincided with his nomination for the Book of the Year award ceremony.

However, Mr Rushdie's The Ground Beneath Her Feet was to lose out to JM Coetzee's novel for a second time.

Disgrace also took the most recent Booker Prize, an award Mr Coetzee first took back in 1983 for The Life and Times of Michael K.

Mr Coetzee, who did not attend the ceremony, was cited by the judging panel for his "wonderful economy of the language" and his "great imagination and power."

"Disgrace" has already won JM Coetzee two awards

Disgrace is about the sudden fall from grace of a professor who loses his job in disgrace over an impulsive and scandalous affair with one of his students.

Sinking into hopelessness, he resigns from his position and goes to live with his daughter in the South African Eastern Cape. They are attacked by three men who set him alight and rape his daughter.

The book, set against the profound changes sweeping across a post-apartheid South Africa, was lauded by the judges as "a work that reverberates in the imagination long after the last page has been turned".

Protest

Security was intense for the awards banquet because of Mr Rushdie's presence.

As he arrived for the ceremony, several hundred Muslims staged a protest, burning an effigy of the author and calling for his death on blasphemy charges.

The call came despite a recent declaration by Iran that it did not want the 1989 fatwa enforced.

Best first book

The Best First Book award went to Canadian Jeffrey Moore for Prisoner in a Red-Rose Chain, which tells the tale of a lecturer who believes his life has been predetermined by a page torn from a random book.

The head of the judging panel said the author's satire of the illusions cultivated by academics, artists and writing itself was "wry yet evocative, capturing both the ennui and wonder of modern urban life".

Accepting his prize, Mr Moore paid a wry tribute to the night's biggest attraction. "I want to thank Salman Rushdie for making a special trip to see me win this award," he said.

"The only award I have ever won was for perfect attendance at Sunday's school aged eight," he told a well-attended ceremony in the Indian capital.