Martin Amis claims that the Prince of Wales' views caused a row at a dinner party after Rushdie was issued with the death sentence by Islamic clerics in 1989.
In an interview with 'Vanity Fair' magazine, he claims that the heir to the British throne told him that he would not offer support "if someone insults someone else's deepest convictions".
Amis is quoted as saying: "I had an argument with Prince Charles at a small dinner party. And I said that a novel doesn't set out to insult anyone: 'It sets out to give pleasure to its readers,' I told him.
"A novel is an essentially playful undertaking, and this is an exceedingly playful novel. The Prince took it on board, but I'd suppose the next night at a different party he would have said the same thing."
'Vanity Fair', marking 25 years since the fatwa was issued by the Iranian government under Ayatollah Khomeini, has asked a group of novelists here about their memories of the time.
Stephen King told the magazine that he intervened on Rushdie's behalf after an American book chain said it would not be stocking 'The Satanic Verses'.
Ian McEwan remembered a dinner party he held for the fugitive Rushdie at his Gloucestershire cottage, and "standing the next morning with Salman in the country kitchen, a grey English morning, and he was the lead item on the BBC another Middle East figure saying he too would condemn him to death.
"It was a very sad moment standing buttering toast and listening to that awful message on the radio".
Rushdie, 66, himself told 'Vanity Fair' that "Ian was very upset. For me, there were threats like this every day, sometimes two or three times...I was shaken, I'm sure, but Ian is a loving man, and I think he was even more shaken than I was by the violence of the assault on his friend."
The Booker Prize winning author also recalled novelist Graham Greene calling out to him during a lunch at London's Reform Club in 1989: "Rushdie! Come and sit here and tell me how you managed to make so much trouble! I never made nearly as much trouble as that!"
Rushdie described Greene's salute as "oddly comforting" as "England's most famous living author was making light of the fix he was in".