George Smith, a former Welsh Guardsman who was said to have had a drink problem and to have been traumatised by service in the Falklands campaign, claimed in 1996 that he had been raped by another member of the Prince’s staff, who is referred to in the report as “AA”.

The Prince of Wales, other staff members and even Hounslow police gave no credence to Mr Smith’s complaint. Only Diana, Princess of Wales, took his claim seriously enough to pursue the allegation. Mr Smith was subsequently made redundant and given a pay-off.

Sir Michael Peat emphasised yesterday that it had not been part of the inquiry’s remit to discover if the rape had occurred, but only if there had been an improper cover-up of the allegation.

The report concludes that there was an anxiety in the household to prevent publication of the allegation, but there was a genuine belief that it was untrue. “There was not, therefore, an improper cover-up in the sense that those involved deliberately or dishonestly sought to suppress what they believed to be, or thought might be, true.”

Fiona Shackleton, the Prince’s solicitor, told an internal household meeting that she had been ordered to “make it go away”, and said that an encounter she had had with Mr Smith was the low point of her professional career. The report finds her remarks “puzzling”, and her choice of words “unfortunate”.

When the Princess first reported Mr Smith’s allegation, St James’s Palace suspected it was just another shot in the war between the Princess and her estranged husband.

The inquiry interviewed Sandy Henney, the Prince’s former press secretary. “Miss Henney put it graphically to us: ‘All we had was one poor, sad individual making an allegation of assault some years before to the Princess who, at the time, quite frankly wanted to find ways of hurting/embarrassing her husband.”

The report says: “It had been decided that Mr Smith had to go; and those were the instructions received from the Prince of Wales. A major concern, if not the major concern, from an early stage was to avoid publicity being given to what was believed to be a baseless allegation.”

The objective was to remove Mr Smith without giving him cause to repeat the allegation, and he was paid off with £38,000. “The settlement with Mr Smith was very generous, but not to the extent that we are driven to conclude that it derived from an improper motive (that is, to suppress the truth.)”

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