Mourners including McLaren's former partner Dame Vivienne Westwood, friend Sir Bob Geldof and Sex Pistols' drummer Paul Cook sang along to McLaren's recording of Max Bygraves' You Need Hands.
The 200-strong funeral party was also encouraged to dance around and throw up their hands, which many of them did — as well as shedding a tear.
McLaren's black coffin, which was spray-painted with the words “too fast to live too young to die”, was carried out of de-consecrated St Mary Magdalene Church to the strains of Sex Pistol Sid Vicious's version of Frank Sinatra's My Way.
The coffin's slogan was the name of McLaren's shop on King's Road — London's centre of punk fashion in the 1970s — before it was renamed “Sex”.
Dame Vivienne paid tribute to her former partner and the father of her son Joseph Corre.
McLaren died aged 64 from mesothelioma, a rare cancer, in a Swiss clinic earlier this month.