Rushdie's lawyer Mark Stephens said today that the authors of the book now "accepted that much of the story published in the Mail on Sunday was false". He said that Evans had been "over-egging" his position at the time: "He was a police driver making out he was an armed special protection officer," he said.

Stephens added that Rushdie had made no requests for damages, nor for any changes in opinions in the book, merely for "the falsehoods" to be changed. "The authors have admitted that there were falsehoods in the original manuscript and have made amendments accordingly," he said.

The publisher of a book that Salman Rushdie says portrays him as "mean and arrogant" has delayed publication for a week following Rushdie's threat of legal action. On Her Majesty's Service by Ron Evans was due to be published yesterday, but John Blake Publishing has moved this to August 11 in the hope that once Rushdie has read the book in its entirety he will see it as a "light-hearted and affectionate" portrait.

Rushdie's lawyers contacted John Blake earlier this week over excerpts in the weekend papers from the former Special Branch officer's memoir. These claimed that the security guards protecting Rushdie during the fatwa against him "got so fed up with his attitude that they locked him in a cupboard under the stairs and all went to the local pub for a pint or two". Evans also claimed that the guards nicknamed Rushdie Scruffy, which Rushdie said was untrue.

Managing director John Blake said he was confident that once Rushdie had read the whole book he would realise it was no threat to security. He added: "If anyone should be defending freedom of speech it should be him ... I can't believe that he'd really want to ban a book because it says that detectives named him Scruffy -- in a way that's almost affectionate."

Iran accused Britain yesterday of insulting Islam by awarding a knighthood to Salman Rushdie, whose novel The Satanic Verses prompted the late Ayatollah Ruhollah Khomeini to issue a fatwa calling for his assassination. Mohammad Ali Hosseini, a spokesman for Iran's foreign ministry, portrayed the decision to honour the novelist as an orchestrated act of aggression directed against Islamic societies, describing Rushdie as "one of the most hated figures" in the Islamic world.

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Rushdie returned to public life in 1999, a decade after being forced underground by Khomeini's declaration. He was the most high-profile of the 946 people honoured in the Queen's birthday list, drawn from nominations by the public or expert organisations. A spokesman for the Foreign Office said the honour was "richly deserved" and the reasons for it were "self-explanatory".

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In a statement following the announcement of his knighthood on Saturday, Rushdie, 59, said he was "thrilled and humbled to receive this great honour". Literary supporters said the decision to include the novelist among 21 knighthoods was overdue, claiming the British establishment had for many years been reluctant to be associated with the controversial figure.

Rushdie now feels "nostalgic for the days of the Seventies and Eighties, when the way in which minority groups organised themselves in this country was along secular lines", and notes: "It's been a bit hijacked in the last decade and a half by religious politics. I just think that it's important to get back to the other stuff. But while we're talking to the wrong people, it's difficult to see how we're going to solve any problems."

As for the foreign preachers of holy murder who now, at last, face expulsion, to report that Rushdie sounds relaxed about their loss would be putting it too blandly. "I have to tell you - I don't give a damn. They're awful people." But, given the recklessness with civil liberties he deplores in New Labour, he concedes: "The issue of the baby and the bath water does arise. I do think that the Government has strong authoritarian tendencies, and I do worry that, now that it feels justified in slinging people out, it'll start slinging out anyone whose face it doesn't like."

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In many ways, Rushdie's new novel, Shalimar the Clown (Jonathan Cape, £17.99), enacts exactly this dismaying process. The book shows, through a quartet of tragically entangled lives, the descent into cyclical slaughter and repression of the once-idyllic valley of Kashmir. That "tasty green sweetmeat caught in a giant's teeth" has been torn for two decades between Islamist atrocities and Indian army reprisals. And the book depicts the globalisation of this conflict, in a rage-filled "time of demons" when family rows spill out over the oceans and "everywhere was a mirror of everywhere else".

As for the people of Kashmir, says Rushdie, their attitude towards the headscarved jihadi thugs and uniformed military thugs remains the same: "Would you both please f*** off. That has been, quite consistently, the position of ordinary people in Kashmir for the past 60 years. And that's the only option nobody considers."