ST JAMES’S PALACE denied last night that it had covered up allegations of a homosexual rape within the Prince of Wales’s household amid growing pressure for a full explanation of its role.

The Palace said that there was no evidence of the existence of a tape recording of a conversation between Diana, Princess of Wales, and the alleged victim.

Speculation intensified yesterday that the alleged recording had led to the last-minute intervention by the Queen in the trial of the Princess’s former butler, Paul Burrell.

There have been suggestions that the police investigation of Mr Burrell had been prompted by the belief that he may have taken a locked box in which the Princess was rumoured to have kept the tape.

St James’s Palace is concerned that an allegation of a cover-up would be highly damaging for Prince Charles. Concerns increased yesterday following an article in The Spectator magazine, under the heading “Perverts and the Course of Justice”, which aired suspicions of a “homosexual mafia” in the Palace.

A Palace spokeswoman insisted: “We did absolutely nothing wrong, we did everything properly, and the allegation was investigated by the police. At no stage have the police produced such a tape and no witness who has heard such a tape has come forward and we have no evidence of the existence of such a tape.”

However, she confirmed that Scotland Yard had not been called when the Palace was first informed in 1996 of allegations that the man had been raped by one of the Prince’s most trusted servants seven years earlier. “No evidence was forthcoming and the alleged victim did not want to pursue the matter further,” the spokeswoman said.

The alleged victim later received a severance payment of up to £50,000.

Police began an investigation into the rape allegations in October last year. The Palace said that during the inquiry the alleged rapist was interviewed by detectives and produced contemporary evidence in support of his denials.

The Palace said the decision not to charge the alleged rapist had been made by the Director of Public Prosecutions following advice from the Crown Prosecution Service and the Metropolitan Police.

Mr Burrell denied yesterday that he had taken the box. “The whereabouts of the contents of that box are a mystery to me also. The contents were the business of Diana only. I’ve never heard the tape,” he told the Daily Mirror.

He claimed that the Princess had taped the conversation in 1996 using a recorder hidden under her jacket. “The tape contains intimate revelations of a very personal nature of an incident which took place between two men who worked in the Royal Household,” Mr Burrell said.

“This account was taped by the Princess as proof of evidence. She was always determined to safeguard both parties. The man turned to the Princess for comfort. He was distraught and clearly heading for a nervous breakdown.”

Mr Burrell also claimed that Earl Spencer’s rift with the Windsors ran so deep that he removed the Royal standard from Diana’s coffin moments before it was buried at Althorp House and replaced it with a Spencer flag.

After making the switch, the Earl announced to the Prince of Wales, Prince William and Prince Harry: “She is a Spencer now.”

“I knew it was not what Diana would have wanted,” Mr Burrell told the Daily Mirror. “With that act her brother was depriving the Princess of her proper status in life, a status of which she was proud.”

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