The Princess, 60, whose husband is a first cousin of the Queen, fell for the “fake sheikh” disguise of its undercover investigator Mazher Mahmood, the News of the World claimed yesterday. Employing the same pose, Mahmood has previously extracted indiscretions from the Countess of Wessex and Carole Caplin, erstwhile friend of the Blairs.

According to the newspaper, the Princess described the late Diana, Princess of Wales, as “bitter”, “nasty” and “strange”; she claimed that the Prince of Wales was deeply jealous of her popularity, had never loved her and had merely “married a womb”.

She is also reported as insisting that Camilla would be crowned queen, in spite of denials by Buckingham Palace that the Duchess of Cornwall would ever be anything more than Princess Consort. The Queen, she claimed, still had difficulty in accepting her marriage to the Prince. The Princess also speculated on the possible mental health of the Queen, believing that she could remain as alert as her mother to an advanced age. She dismissed the possibility of Prince William marrying his current girlfriend, Kate Middleton, or of Prince Harry marrying Chelsy Davy; both princes, she said, were too young.

But she defended Harry for wearing a Nazi uniform, including swastika, to a fancy-dress party, saying that had he worn the equally-tainted symbol of the hammer and sickle, there would have been much less fuss. The Princess’s Austrian father was in Hitler’s SS during the war.

The NoW claimed that its reporter had had two meetings with the Princess, one at Nether Lypiatt, the Gloucestershire house that she and her husband are trying to sell, and once over dinner at Claridge’s. Simon Astaire, the Princess’s spokesman, refused to comment on the report yesterday. “We are not going to grace this kind of story with a response,” he said.

Nether Lypiatt has been owned by the Princess and her husband since 1980, and has been on the market since May. The Princess has reportedly turned down an offer of £5 million from Damien Hirst, the artist, and is said to be looking for nearer £6 million. To encourage a sale she allegedly offered to include furniture, bed linen and tea services, and to open a supermarket and give a lecture in Dubai for a fee of £25,000. If they sell the house the couple, who receive no funding from the taxpayer, will live in their apartments at Kensington Palace, which are subsidised by the Queen to the tune of £120,000 a year.

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