The 67-year-old star of Alfie, The Italian Job and, more recently, Little Voice and The Cider House Rules said he was delighted with the award.

"It's the greatest honour I've ever had, or am likely to have, in my life and I am very quietly but so ecstatically happy," he said from Hollywood where he is working on his latest film.

Arise...

Michael Caine, Knighthood Paul Smith, Knighthood Paddy Ashdown, Knighthood Beryl Bainbridge, Damehood Mary Peters, Damehood Sam Mendes, CBE Michael Parkinson, CBE Sian Phillips, CBE Michael Brunson, OBE Lulu Kennedy-Cairns, OBE Colin Dexter, OBE Joanne Rowling, OBE Liz Dawn, MBE Lonnie Donegan, MBE Jeremy Guscott, MBE Paul Lawrie, MBE

Former leader of the Liberal Democrats, Paddy Ashdown also receives a knighthood, chat show host Michael Parkinson receives a CBE and singer Lulu an OBE.

The widely predicted knighthood for Oscar winner Caine comes just months after the London-born actor told the Bafta ceremony that he never felt at home in Britain.

There was also a knighthood for top suit designer Paul Smith - who counts Tony Blair and actor Hugh Grant among his clients. And reclusive billionaire twins David and Frederick Barclay receive knighthoods for charitable services.

Awards go to soap stars Wendy Richard who plays Pauline Fowler in Eastenders and Coronation Street's Vera Duckworth - Liz Dawn. Both receive MBEs as does television presenter Carol Vorderman.

Carol Vorderman: Conundrum solved!

Novelist Beryl Bainbridge receives a damehood while Joanne Rowling, best-selling author of the fabulously successful Harry Potter books, collects an OBE.

And champion jockey turned racing thriller writer, Dick Francis, gets a CBE. The Queen Mother - his most high profile fan - has asked him to write a new book to mark her 100th birthday on 4 August.

Oscar-winning director Sam Mendes, whose film American Beauty dominated this year's Academy Awards, gets a CBE for services to drama.

Meanwhile sculptor Andy Goldsworthy, known for his geometric works in natural materials including ice, leaves, and twigs, receives an OBE.

Vivacious Lulu gets an OBE

In sport there is a damehood for Northern Ireland's Olympic gold medallist Mary Peters and an OBE for Jim Fox, another Olympic gold medallist, both pentathlon champions.

The Governor of the Bank of England, Eddie George becomes a Knight Grand Cross of the Order of the British Empire.

Prince William and Prince Harry's former prep-school headmasters, Gerald Barber and Charles Marston, are each awarded an LVO - Lieutenant of the Royal Victorian Order - a personal honour from the Queen.

Dome designers

Two designers from the Millennium Dome are also honoured.

Timothy Gardom, content editor of the controversial body and faith zones becomes an MBE while Mark Fisher, receives an OBE for his work as creative director of the spectacular Millennium Show staged in the Dome's central area.

Paddy Ashdown receives a knighthood for political service

But by no means all of the honours go to household names; teachers, health workers and volunteers feature on the list.

Husband and wife John and Celia Brain who have devoted more than 20 years to fostering and caring for children with cancer and leukaemia said they were shocked to have been awarded MBEs.

Mrs Brain said she thought the letter notifying them of the honour was junk mail at first and nearly threw it away.

Another award for service to the community went to Warwickshire "lollipop lady" Diane Wright, who received an MBE.

Mrs Wright, who has been helping children cross the road for 23 years, said she was "delighted" at her award and at the age of 67 still loved every minute of her job.