The Only Fools and Horses actor John Challis has died peacefully in his sleep after a long battle with cancer, his family have said.

Challis was best known for his portrayal of the unscrupulous secondhand car dealer Boycie in the sitcom, alongside David Jason and Nicholas Lyndhurst. He cancelled a 30-date speaking tour this month after only one appearance due to ill health.

“It is with heavy hearts that we bring you such sad news,” read a statement from his family. “Our dear friend and yours, John Challis, has died peacefully in his sleep, after a long battle with cancer.

“He will always be loved for being Boycie and leaves a great legacy of work that will continue to bring pleasure and smiles for many years to come.”

Challis played Terrance Aubrey Boyce in Only Fools and Horses from 1981 to 2003, as well as in the Boycie-focused spin-off show The Green Green Grass.

Jason described Challis as “a gentleman in the true sense of the word”. He said Boycie was “a character so well loved by the many fans of that show so I am pleased that he witnessed the outpouring of admiration recently shown for the 40th anniversary of the first episode in 1981. I send my love and condolences to his wife, Carol.”

Challis recently became an honorary citizen of Serbia, where the BBC sitcom remains hugely popular. He made the documentary Boycie in Belgrade, exploring why the show was so beloved in the Balkan country.

Boycie, a cigar-smoking businessman with a mocking laugh, regularly butted heads with Jason’s Del Boy. Sue Holderness, who played Boycie’s wife, Marlene, in the sitcom, paid tribute to Challis as her “beloved friend”.

She said in a statement: “Marlene without Boycie – it’s unthinkable. John Challis was my partner on screen and stage for 36 years and my beloved friend. RIP darling John. I will miss you every day.”

Challis was also known for playing Monty Staines in the ITV sitcom Benidorm.

In a podcast last year, Challis said being part of Only Fools and Horses was “the luckiest thing ever”. He praised Jason as “the consummate comedy character actor, the best we’ve ever had, probably” and said Jason’s chemistry with Lyndhurst put the duo “in the same bracket as Laurel and Hardy”.

He was only originally booked for a scene in the second episode, Go West Young Man, but said the show immediately catapulted the whole cast to fame. “It was the first time many of us were stopped in the street by people who weren’t policeman, coming up and saying how much they enjoyed the show and started quoting lines,” he told Away With Media.

He was cast in Only Fools and Horses after appearing as a bent police officer in Citizen Smith, an earlier show by the same writer, John Sullivan, he said. He gave his character a nasally voice which Sullivan complimented and vowed to use again.

Boycie’s famous mocking laugh “just appeared one day in rehearsal” when the series was well under way, Challis told the podcast. “I suddenly remembered somebody in the pub who laughed rather like that, it was a woman actually … a sort of machine gun laugh, and I just did it and everybody laughed so we kept it in.”

A gifted impressionist from an early age, Challis was steered away from acting as a teenager and instead became articled to an estate agents in Surrey. He lasted six dull months before being sacked and then “ran away” with the Argyle Theatre for Youth, he told the Guardian earlier this year.

Over the decades he accumulated an eclectic array of friends, including the rapper Ice-T and the boxer Frank Bruno, who tweeted on Sunday that Challis would say to him: “Franklyn my dear boy, how the devil are you, boxed anybody round the ears recently?”

A year before he died, Challis said he would have loved to appear in Ice-T’s crime show, Law and Order: Special Victims Unit. The odd couple never met but would chat via Twitter, he said.

Challis’s family requested that instead of flowers, donations are made to his favoured animal charities: Cuan Wildlife Rescue, Tusk and the British Hedgehog Preservation Society.