The Queen is shopping around for a private jet, despite a report last week claiming she was unable to afford a lick of paint as part of palace maintenance.

A government source admitted that Buckingham Palace will be “in charge of procurement” of the bespoke plane and specifying its internal design.

A small executive aircraft for the Queen, such as a Gulfstream or Learjet, would cost taxpayers about £5m to £10m. It would also be available to Gordon Brown and senior ministers.

While the rest of the country is being squeezed by rising prices, the Department for Transport has agreed that the palace can draw up its own specifications for the plane. They are expected to include a bar, catering facilities and in-flight entertainment systems, as well as up to 12 seats to accommodate courtiers, officials and the Queen.

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Senior members of the royal family will also be able to use the plane, including Prince William, who recently gained his pilot’s licence and used an RAF helicopter to attend a stag party on the Isle of Wight.

Though modern executive jets are luxurious, the purchase will in one sense mean the Queen is downsizing. Previously she has been able to use larger planes provided by the RAF, but the government recently decided to axe the Royal Flight.

The prime minister rejected plans to provide him and the royals with a large plane, similar to the US president’s Air Force One, when it emerged it would cost about £100m. The decision to purchase a smaller plane was taken as a compromise.

MPs have criticised the allocation of public money to a new, personalised aircraft, saying it sent the wrong message about preserving the environment.

“It looks like we got rid of Blair Force One only to get Brown Force One,” said Norman Baker MP, the Liberal Democrats’ transport spokesman.

“The reality is that the government should not be promoting polluting air travel and should be setting an example. The message it is sending out is jet travel is fine for those who can afford it – in this case, members of the royal family, thanks to the generosity of the public purse.”

The plane will be used for internal flights and short trips abroad. The royals will have to charter larger planes or book seats on scheduled flights for long-haul trips.

A formal tender document to aircraft companies to design the bespoke plane is to be issued later this year.

A spokesman for the Queen said: “We are currently working with the Department for Transport to identify an appropriate aircraft for the use of members of the royal family and ministers.

“We are in the early stages of this review and no decisions on the type of aircraft have been taken as yet.”

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