Geoff van Nelder from the British Science Fiction Association kindly reviewed TC and commented:

One issue is that of italics or other means to identify when a character is thinking as opposed to thinking or when the narrator is commentating. In workshops I’ve attended it has been stressed that the owner of the POV has sole control of thoughts. There is no narrator’s voice as such unless you are using the Omniscient POV – not recommended esp for non-established writers. One important point here, is that there is NO convention on this issue. Different authors handle the display of thoughts in their own way. In mine there is no separation between thoughts and narration because as above, the POV owner has it for that scene / section. The problem in using italics or other differentiation technique is who is then the narrator?

eg excerpt from The
Dangerous Moon by Geoff van Nelder.
———–
Fred thought, ‘If I jump,
I might not make it across that gap.’ Fred knew that if he fell he would be
killed…
———–

Both clauses represent Fred thinking, don’t they? I know the first could be regarded as what he was thinking at that moment and the other is knowledge. Can you access knowledge without thinking?
Errmm maybe you guys can but this one can’t!

Of course we know that each editor has their own opinions on this and every other issue. The bottom line will always be: does it work? So does it really matter?

In writing speech there is a difference between direct and reported.

“I like this,” she said. (direct speech)
She said that she liked it. (reported speech)

The value of this is reported speech keeps us at a greater distance from the character. We don’t actually see the character talking. Instead it is the narrator who is talking, telling us what happened.
The convention of using italics for direct thought and saying what the character hought is exactly the same distinction.

If I jump, I might not make it across that gap. (direct thought)
Fred knew that if he jumped he might not make it across the gap. (reported thought)

In direct thought you don’t need to say “Fred thought” since the reader knows that italic means the character is thinking. Likewise you don’t need quotation marks. The distinction between thought and knowledge which Geoff draws strikes me as not relevant. It’s just a stylistic mechanism for controlling something we might call the character’s or narrator’s point of view.