Elvis and Di step out

Two months after splitting with his wife, Elvis Costello and his new girlfriend Diana Krall have been pictured together for the first time.

The man who rode to fame as the intelligent answer to punk rock was spotted with Ms Krall, the Queen of smooth jazz, at Nello's restaurant in New York. They chose a window seat and sat holding hands across the table.

Costello, whose real name is Declan MacManus, had been married to Cait O'Riordan for 16 years before they separated last November. They met in 1985 when Costello produced the Pogues' second album, Rum, Sodomy And The Lash. O'Riordan was a singer and bass player with the band.

As they were married, Costello said: "We're the Sonny and Cher of the Eighties." But friends said they had drifted apart.

Often called "the new Ella Fitzgerald", Ms Krall, 36, is a singer and piano player with a voice described by one critic as "the vocal equivalent of fingers drifting down a spine".

With the emergence of smooth jazz as a worldwide sales phenomenon, her records sell by the millions. Her music has also featured on the hit comedy Sex And The City. Though she was wrongly linked last year with Clint Eastwood, he is one of a list of star fans which also includes Sir Elton John, Sarah Jessica Parker, Harrison Ford, Sting, Bill Clinton and Dustin Hoffman.

In a varied career, Costello has also tried his hand at jazz. In 1998, he collaborated with Burt Bacharach on a hugely successful album of love songs and he has also worked with classical performers including the Brodsky Quartet and Anne Sofie von Otter.

Costello shot to fame in 1977 with the release of his debut solo album, My Aim Is True.