The Prince of Wales's office has announced an internal investigation into claims of cover-ups and corruption at the heart of Britain's royalty.
The investigation, which will be conducted by the prince's private secretary, will look at the collapse of the Paul Burrell trial, allegations of a covered-up homosexual rape and claims that Palace staff have been selling royal gifts for personal gain.
Sir Michael Peat will examine concerns about the way the trial of the late Princess Diana's butler, Mr Paul Burrell, ended - when the Queen came forward with crucial information.
The intervention has led to claims that the Royal Family intervened to prevent embarrassing revelations emerging when Mr Burrell gave evidence.
But the Queen will not herself be a "witness" in Sir Michael's review as Buckingham Palace said he already knew her side of the story.
Sir Michael will be joined on the inquiry team by a lawyer, Edmund Lawson QC, and their report is expected to make public by Christmas.
Sir Michael today also offered the first detailed explanation as to why the Queen did not come forward earlier to say that Mr Burrell had told her in 1997 he was holding on to some of Princess Diana's possessions for safe-keeping.
The revelation led to the collapse of his trial but Sir Michael said she was unaware this would happen.
The royal inquiry will also examine the issue of gifts amid allegations that the Prince of Wales allows unwanted presents to be sold for cash.
This aspect of the inquiry was triggered by claims that Mr Michael Fawcett, the Prince's personal assistant, has been disposing of Price Charles's unwanted gifts, keeping up to 20 per cent of the profits and earning himself the sobriquet `Fawcett the Fence'.
As well as specifically examining this allegation, observers hope the investigation will shine a light on the fate of the many gifts the royals receive. Members of the Royal Family receive hundreds of presents, often from people they have never met.
At the height of their popularity in the 1980s, the Prince and Princess of Wales received so many gifts they resorted to burning them. Clothes and ornaments arriving by the lorry load were systematically bundled into bin liners every month and stuffed into an incinerator at the back of the house.
More recently, Princess Diana instructed Mr Burrell to sell designer clothing to second-hand shops. He would deliver the goods then return to collect the proceeds, earning the princess thousands of pounds which she kept in a drawer as petty cash, Mr Burrell's recent trial heard.
Other members of staff told the court they were asked by Princess Diana to discreetly donate items they did not want to local charity shops.
The practice of passing on gifts has not escaped the notice of the taxman, with the suggestion that if passing on gifts to low-paid staff was how they got paid, then they should pay a portion of income tax on it like everyone else.
But Chancellor Gordon Brown, in an answer to a Parliamentary question, said in July that gifts received in an official capacity were not taxed because they did not belong to individual members of the Royal Family.
This week there have been calls for tighter scrutiny of royal finances. Several Labour MPs called for the convention that the Commons does not debate matters to do with the Royal Family to be suspended.
Mr Ian Davidson, a member of the public accounts committee, said: "All the money they receive [from the sale of gifts] should be used to offset the huge sums which the public purse provides for them."
Announcing the inquiry, Sir Michael denied it would be a whitewash. He said: "Anyone who says it's going to be a complete whitewash doesn't know me very well.
"The Prince of Wales has instructed me to undertake this inquiry without fear or favour, and there is a very eminent QC on the inquiry team who is well known for his intellect and courage.
"I, and more importantly the Prince of Wales, are totally committed to openness and accountability. Points have been raised and the Prince of Wales has asked me to address them."
He said the questions for the inquiry team were:
- Was there any improper cover-up of the 1996 rape allegations?
- Was there anything improper or amiss in the conduct of the Prince of Wales's household with respect to the termination of the Paul Burrell trial?
- Have official gifts been sold?
- Have any members of staff been in receipt of improper payments or benefits?
PA