Entrepreneur Sir Richard Branson has been knighted by the Prince of Wales in an investiture ceremony at Buckingham Palace.

The Virgin boss, 49, who is reportedly worth nearly £2.5bn, celebrated the accolade by throwing a reception for 250 others also receiving honours.

Mr Branson, awarded a knighthood in the New Year's Honours List for services to entrepreneurship, said: "It is such a lovely occasion and we are going to enjoy every minute of it."

Author and academic Sir Malcolm Bradbury was also knighted, while Mark Knopfler, who was lead singer with Dire Straits, was awarded an OBE.

Sir Richard, renowned for his casual attire, dressed up in a morning suit for the first time to receive his knighthood.

"I have never worn a morning suit before, but I quite like it - maybe I will get dressed up like this more often," he said.

The Prince of Wales said he was very pleased to see the British being more business-minded and he was hopeful that it would inspire other generations of young entrepreneurs to build great businesses.

When asked by reporters how it felt to be "Sir Richard", he replied in typical, jovial fashion: "It feels great. It feels odd sleeping with a Lady though."

Dare-devil

Educated at Stowe School, Sir Richard went into business at 16, publishing "Student" magazine and started a students' advisory centre to help young people the following year.

In 1972 he founded Virgin as a mail order record company and opened his first store, in London's Oxford Street.

He went on to build a huge Virgin empire incorporating airlines, railways, records, and shops.

He also captured the public imagination with his dare-devil attempts to break records including his mission to circumnavigate the globe in a balloon.

Sir Richard, said he was accepting his knighthood on behalf of all his employees.

"They have all worked very hard to make Virgin what it is and I am accepting this honour on behalf of them."

Others receiving honours included the Prince of Wales' former bodyguard Chief Superintendent Colin Trimming.

He was made a Lieutenant of the Royal Victorian Order (LVO).

He shielded the Prince from a gunman's shots in Australia during a royal tour in 1994 and received a Queen's Commendation for Bravery.