Is it permissible for a Muslim parent to give his child a Western name in memory and honour of a dead non-Muslim grandparent? What about as a nickname or a middle name?

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.

It is not permissible for Muslims to name their children with names that are peculiar to non-Muslims even if it was a name of a father or a grandfather. This is even more forbidden if such a name reflects their religion or leaders, or if it implies worshipping other than Allaah. In Islam names are of special importance as they have an effect on the psychology of the people called by these names. In reality they represent a title or a slogan of the named person. That's why the Prophet changed some names that contradict the creed and those that have a bad meaning. However, if the name does not have a bad meaning and does not contradict the creed and is not peculiar to non-Muslims then there is no harm to be named with such a name even if non-Muslims have the same name, but Muslims should be distinguished from others in their appearance and affairs. It is also good to change (if possible) the surname or middle name, [when they have a bad meaning] as the Prophet changed some names that have a bad meaning.

Finally, it should be noted that it is not permissible to glorify a non-Muslim or to commemorate him even if he is a father or a grandfather. It is confirmed that the Prophet said: "Do not call a hypocrite a master because if you consider him as such, you have indeed resulted in the anger of your Lord." [Abu Daawood]

Allaah knows best.