Celebratory online drams have been raised, and a special event at Edinburgh's book festival planned, to honour the memory of Iain Banks, the Scottish writer who died on Sunday.

The Edinburgh International Book Festival (EIBF) said it has lost one of its dearest friends but that it would "raise the bloody roof" in a celebration of his work this August.

Creative Scotland, the nation's arts funding body, related on its website a story about Banks – who died aged 59 only two months after revealing he had advanced gall bladder cancer – that showed the "generosity, modesty and wryness of a kind and talented man".

Nick Barley, director of the EIBF, which Banks attended many times, said there would be a special event to remember the writer of fiction and science-fiction on Sunday, August 25.

He said: "Not only has the Book Festival lost one of its dearest friends, but the world has lost a quiet literary giant.

"From The Wasp Factory onwards, Iain's books have been at the heart of a Scottish literary renaissance that has revolutionised this country's understanding of itself.

"At the same time, Iain was a pioneer of a kind of writing that rendered literary genres increasingly unimportant.

"Above all, Iain was always down-to-earth; always one of us."

He said Banks had said he would "bloody love to" be part of a celebration of his work at the festival, and was hoping to read from his last book, The Quarry.

Mr Barley added: "I deeply regret he couldn't be with us long enough to have a final meeting with his loyal audience in our main theatre.

"But we will make certain of one thing: in Iain Banks's name and in celebration of his thrawn, maverick, independent spirit, this August we will raise the bloody roof."

Creative Scotland said in an email after the death of its literary manager, Dr Gavin Wallace, Banks had noted "Death, like life, just isn't fair sometimes".

On Twitter, fans and friends of the writer led by fellow Scottish author Ian Rankin posted pictures of whisky drams as a toast.

"Even the ones that didn't drink were putting a wee bottle of water or a soft drink in their pictures," Rankin said. "It was a lovely sort of communal thing to do."

Another friend, crime writer Val McDermid, toasted Banks "for all the hours of delight and provoked thought".

Rankin told the BBC he believed Banks's best work could still have been ahead of him. "The writing still excited him, the ideas still excited him, there was no shortage of ideas, he wasn't coming to the end of his time as a writer," he said.

He said Banks's wife Adele had emailed friends saying he had been told on Tuesday he had a few months left and then on Wednesday there was a deterioration.

"On Tuesday he was thinking 'Right I've still got a few months. I've got the book coming out, I've maybe got the Edinburgh Book Festival that I can go to'.

"There were still plenty things to be doing and he was loving what life he had left."