He told BBC News: "I already feel the shreds of the fatwa flying away as if they were dust."

James Robbins: "Not all Muslims in Britain are ready to forget"

The man who has been in hiding for nine years is celebrating the prospect of returning to a relatively normal life following the Iranian Government's announcement it will not support any attempt to kill him.

Later, at a news conference, he paid tribute to the book's Japanese translator who was stabbed to death.

He also mentioned the Italian translator, who was knifed, and the "distinguished Norwegian publisher who suffered an assassination attempt".

He added: "I would like to say that I am sorrowful for all the people who have died in demonstrations against The Satanic Verses, particularly in the subcontinent - indeed I feel in many cases they did not even know what they were demonstrating against."

Praise for British Government

Mr Rushdie praised the work of the UK Government and said he had come to learn that freedom of speech is worth fighting for.

Salman Rushdie: "Threat falling away like dust"

The author said he had a message for British Muslims: "I'm extremely happy and relieved that almost 10 years of trial has come to an end.

"I am very grateful to the British Government which seems to have negotiated very toughly and at great length - I must say I did not know it was going on."

But British officials said they did not imagine that the novelist would be walking up and down Oxford Street in central London.

Robin Cook: impressed with the outcome

The British and Iranian governments have now agreed to re-establish full diplomatic relations.

Foreign Secretary Robin Cook said: "These assurances should make possible a much more constructive relationship between the United Kingdom, and I believe the European Union, with Iran and the opening of a new chapter in our relations."

Kofi Annan, Secretary General of the United Nations said he welcomed the announcement, and has been joined in praise for the Iranian Government by the French President Jacques Chirac.

Living in fear

The author has been living under police protection since 1989 when Iran's late spiritual leader Ayatollah Khomeini issued a fatwa, a religious edict, calling for him to be killed.

Now the more reformist Iranian Government has distanced itself from the fatwa and from the $2.5m reward on his head.

Kamal Kharrazi: Government does not back bounty

Iran's Foreign Minister Kamal Kharrazi said his country "dissociates itself from any reward".

He said Mr Rushdie was still guilty of blasphemous abuse of their religion.

Iranian officials say they are powerless to lift Khomeini's fatwa, saying it could have been lifted only by the revolutionary leader himself.

Rushdie: Unrepentant

The author said the experience has taught him a lot about free speech.

"The Satanic Verses is an important part of my work as a writer. I can't imagine the body of my work without any of my books in it.

"I've had an extraordinary education in the importance in fighting for the freedom of imagination, the freedom of the arts and the generalised issue of freedom of speech."

Getting on with his life

The writer added: "I hope this will lead at high speed to the resumption of something that could be called the ordinary life of a writer.

"I hope I will cease to be a supplicant at the door of politicians and cease to be on the television news.