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The festivities began at midday, with a presentation of gifts from both Houses of Parliament in Westminster Hall.
An audience of 2,500, including cabinet ministers and opposition leaders, filled the hall for the televised ceremony.
As Sir Winston and Lady Churchill appeared through St Stephen's entrance, a drummer beat out a "V" in morse code - a tribute to the victory salute which became the prime minister's trademark.
As the cheers died down, the Leader of the Opposition, Clement Attlee, gave the first speech. He paid tribute to his formidable opponent, calling him "the last of the great orators who can touch the heights."
Then blue hangings were drawn back from a new portrait of Sir Winston by the artist Graham Sutherland, a gift from both Houses to the prime minister.
The Father of the House, David Grenfell, then presented him with an illuminated book signed by almost every member of parliament.
In his speech of thanks, Sir Winston referred to the period in his career for which he is most revered - his leadership through the dark years of the Second World War.
"I have never accepted what many people have kindly said - namely, that I inspired the nation," he told them.
"Their will was resolute and remorseless, and as it proved unconquerable.
"It was the nation and the race dwelling all round the globe that had the lion's heart. I had the luck to be called upon to give the roar."
Finally, he acknowledged that age was inevitably drawing his 54 years in politics to a close.
"I am now nearing the end of my journey," he said. "I hope I still have some service to render. However that may be, whatever may befall, I am sure I shall never forget the emotions of this day."
Tributes and birthday gifts have been pouring in from all over the world. Among the presents arriving at Number 10 Downing Street were a floral arrangement in the shape of a cigar, sent from Israel, and a sixpenny postal order - the pocket money of a boy from Hereford.
Sir Winston was to resign as prime minister less than a year later, on 5 April 1955, due to his increasing ill-health. He spent much of his retirement painting and writing The History of the English-Speaking People.
In 1963, the US Congress conferred on him honorary American citizenship.
He suffered a stroke on 24 January 1965 and died, aged 90. His body lay in state for three days at Westminster Hall before he was given a full state funeral. He is buried not far from his birthplace at Blenheim Palace in Oxfordshire.
The Sutherland portrait of Sir Winston Churchill was destroyed by his wife, Clementine, in 1956. She said her husband had always disliked it and it had preyed on his mind.
Graham Sutherland later described the destruction as "an act of vandalism".
A number of studies made for the portrait have survived, however, and are displayed in the National Portrait Gallery in London.
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