Although not exactly the life story of Diana, Princess of Wales, this familiar tale is the plot of an all-star comedy film that opened in France this week to high acclaim and packed cinemas.

Palais Royal, written and directed by and starring Valérie Lemercier, a leading French actress-comedian, is set in a dysfunctional French-speaking royal family somewhere in Europe. But even without its extensive London scenes, there is no doubt about its subject. Palais Royal is the first bigbudget satire on the life and times of Princess Diana.

It is also difficult not to see a little Franco-British one-upmanship behind the lavish launch that the French media have given the film, in which Catherine Deneuve is a diabolical Queen and Lambert Wilson plays a tiresome, polo-playing Prince.

Luciano Pavarotti plays himself, weeping at the Princess’s funeral, and David Beckham is named in a bit part for the final bungee leap from Tower Bridge, a charity event called “Give Peace a Jump” although he is never seen.

The Princess Diana send-up is obvious from the opening scene, in which mourners pile teddy bears, flowers and notes at the palace gates and a female pastiche of Sir Elton John warbles a joke Candle in the Wind at the funeral service for “Princesse Armelle”.

At the opening night in Paris on Wednesday, the audience roared with mirth as Lemercier camped up the trouble-making Princess, who joins the Royal Family as a virginal speech therapist. She imitates Princess Diana’s gestures and magazine photo-shoots and copies her Muslim head-covering while on charity missions.

When Princess Armelle exposes her husband’s adultery, the headline over his mistress’s picture reads “Our Camilla”.

Lemercier, 41, who has made her name as a caustic stand-up comedian and star of comedies, said that her “realistic fable” was inspired by the Princess’s life, but it was also a broader commentary on the absurdities of monarchy.

“I didn’t want to create an operetta kingdom,” she said of her film, which draws on the royal families of Britain, Belgium, Denmark, the Netherlands and Monaco. It is, above all, the private life of these people that interests me.

“Diana was a woman who was extremely wounded and humiliated. She told Charles that she did not know that there were to be three in her marriage,” Lemercier said. “She was in love with Charles and she realised that he had something with Camilla. Diana was very desperate.”

Her Princess Armelle “has Diana’s capacity for manipulating the press, her change in looks, her great shyness which becomes self-assurance, her wounded, victim side,” she said.

Critics heaped praise on the film. Le Monde compared it with the work of Sacha Guitry, the satirist; Le Figaro called it a brilliant, incisive parody. Rare dissent came from La Croix. “Lemercier refuses to take into account a destiny that was also tragic. She should have used finesse to avoid this pitfall. Her failure to do so is more than bad taste, it is an error.”

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