New Year Honours: Success of song for Diana propels Elton John to a popular knighthood

Elton Hercules John, the singer whose recording of Candle In The Wind following the death of Diana, Princess of Wales, raised pounds 20m for her charities, wins the prize for the most memorably named knight of the realm and the most memorable summing up of his previous meetings with the sovereign - "We're just a couple of queens together."

The relatively rare occurrence of a new theatrical knight will be applauded as the recipient is Michael Gambon, a stalwart of the National Theatre since the Olivier years. Gambon achieved national fame with his performance as The Singing Detective in Dennis Potter's television series. Another great British stage actor to be honoured is Alan Howard, a star with both the Royal Shakespeare Company and National Theatre. He is appointed CBE.

Annette Crosbie, a veteran stage actress who has won huge recognition through a television role - as the long-suffering Mrs Meldrew in One Foot In The Grave - is appointed OBE.

Knighthoods in the arts go to the composer Richard Rodney Bennett; to Colin St John Wilson, architect of the perennially troubled British Library; to the 81-year-old abstract artist Terry Frost and to the permanent secretary at the Department of Culture, Media and Sport, Hayden Phillips. Lord Rothschild, benefactor and chairman of the Heritage Lottery Fund, is made a Knight Grand Cross of the Order of the British Empire.

There is an OBE for the sculptor Anthony Gormley, whose 60ft-high Angel Of The North will soon be a fixture on the Gateshead landscape. Michael Grade, the former chief executive of Channel 4, is appointed CBE, as is Gwynne Howell, the operatic bass singer.

One of the most overdue honours comes for the actress Deborah Kerr, who is appointed CBE at the age of 76. Though thought of as a quintessentially cool and refined British actress throughout her Hollywood years, she is also remembered for one of the most striking and sexual images in the history of cinema - rolling in the surf with Burt Lancaster in From here To Eternity.

Alan Freeman, 70, the seemingly evergreen DJ who, for better or worse, gave the nation the phrase "Greetings, Pop Pickers" is appointed MBE. There is a CBE for the singer Petula Clark. Now aged 64, she began singing in 1949 and with sales of 68 million singles and albums to her name she is the biggest selling British female vocalist ever.

In literature, the doyen of science fiction writers, Arthur C Clarke, is knighted. And one of Britain's best-loved comic novelists, David Lodge, is appointed OBE. The publisher and Labour benefactor Paul Hamlyn is made a life peer.

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