Jury head Stephen Frears was on hand to congratulate Mungiu

The film, which follows the harrowing journey of two women as they seek an illegal abortion in Communist Romania, is directed by Cristian Mungiu.

A Russian actor and a South Korean actress took top acting honours at the annual festival, now in its 60th year.

Jeon Do-yeon was named best actress for Secret Sunshine, while Russia's Konstantin Lavronenko won best actor.

The 46-year-old actor won the acting award for his role in Russia's The Banishment, by director Andrei Zviagintsev.

"This story, in which we believe so much, is going to reach lots of people now," said Palme d'Or winner Mungiu, speaking at the festival's closing ceremony at the Grand Theatre Lumiere.

"I also hope that this award that I am getting tonight is going to be good news for small film-makers from small countries because it looks like you don't necessarily need a big budget and a lot of stars."

Do-yeon plays a grieving mother and wife in the South Korean drama

US director Julian Schnabel won the best director prize for his adaptation of the best-selling French book, The Diving Bell and the Butterfly, while Japan's The Mourning Forest claimed the Grand Prix.

The Jury Prize was shared between Mexico's Silent Light, by Carlos Reygadas, and animated Iranian film Persepolis, from Marjane Satrapi and France's Vincent Paronnaud.

Another US director Gus Van Sant, and Cannes favourite, won a special prize - created to celebrate the festival's 60th year- for his film Paranoid Park, about a teenage skateboarder's dark secret.

Actress Jane Fonda was handed a surprise lifetime achievement award by festival chief Gilles Jacob. "You are a woman who fights and wins," he told the 69-year-old Hollywood star.

Fonda said she was "overwhelmed". "I have the feeling my father is with me tonight. The whole Fonda family thanks you," she said in French.

Fonda received a surprise lifetime achievement award on Sunday

The prize has only been awarded on three previous occasions, to French directors Alain Resnais and Gerard Oury and the French actress Jeanne Moreau.

The international jury, led by British director Stephen Frears, selected the winners from a shortlist of 22 films, which included Quentin Tarantino's Death Proof, David Fincher's Zodiac and Wong Kar Wai's My Blueberry Nights.

US film-makers Joel and Ethan Coen had been among those tipped to take home the Palme d'Or, but left empty-handed.

In contrast to last year, which saw Ken Loach's The Wind That Shakes the Barley take the top prize, no British films featured in this year's competition.