Honecker, 81, reviled in Germany as the "purple witch" because of the blue-rinsed hairstyle she used to have and her harsh style of leadership in the communist German Democratic Republic, clapped, sang, waved and looked healthy and fit during the ceremony in the Nicaraguan capital Managua, which was also attended by Venezuela's left-wing firebrand president Hugo Chavez.
She has lived in the Chilean capital of Santiago since 1992. Erich Honecker, who led the GDR from 1971 until 1989 and was accused of treason, corruption and abuse of power after the fall of the Berlin Wall, died in Chile in 1994.
He had been put on trial in Germany on manslaughter charges for ordering East German troops to shoot people trying to flee across the Berlin Wall, but he was released in 1993 because he was suffering from liver cancer, and he emigrated to Chile where he died.
Margot Honecker, a former East German education minister, accepted the "Ruben Diario" prize at a ceremony marking the 29th anniversary of his Sandinista Revolution. The ceremony was also attended by Aleida March, widow of Cuban revolutionary Ernesto "Che" Guevara.
Rosario Murillo, Ortega's wife, said of Erich Honecker: "He showed such solidarity and was so special and loving to the free people of Nicaragua."
Media reports said that when Margot Honecker received the award, she turned to the crowd, raised her clenched fist and called out: "Long live the revolution, long live Nicaragua!"
The ceremony was widely reported in the German press. "She's still kissing left-wing rulers," wrote mass circulation Bild. "They celebrated the purple witch as if the horrific Communist Party regime and the killings at the Wall had never happened."
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