Inside Story: Princess Divided: Celebrity or royalty? Internal confusion rather than external pressure has led to retreat, says Richard Tomlinson

LAST Wednesday evening, in a hospitality suite at London's Wembley Arena, an eclectic group of the famous and not-so- famous were arranged in a line. At one end, were rock stars George Michael, Mick Hucknall and David Bowie. At the other, were the Government and Opposition health spokespersons, John Bowis and Dawn Primarolo. In between were a swathe of Aids researchers and charity fundraisers, including the film producer David Puttnam.

They were waiting to meet the Princess of Wales, attending her Concert of Hope to mark World Aids Day; what was even stranger than the mixture of people was the way they behaved when she arrived. No one, it appeared, could agree whether they were in the presence of royalty or mere celebrity. Stranger still, neither did Diana seem to know.

She brought the usual entourage for a royal engagement: an equerry, Captain Edward Musto, RM, who looked ill at ease next to David Bowie's spectacularly unbuttoned wife, the Somalian model Imam; and a lady-in-waiting, billed in advance as Anne Beckford-Smith, but in fact her sister, Sarah.

Some of the line-up felt they ought to bow or curtsy (Ms Primarolo, wrestling with her socialist principles, merely inclined her head). Diana treated them with regal grace. Others - Puttnam was one - preferred a democratic handshake, with no value-added obeisance. Diana took them in her stride.

But with those she knew well, her royal guard dropped entirely. 'Snap]' she giggled, pointing at Les Rudd of the National Aids Trust, whose cream- coloured suit matched her own. It was not a remark her mother- in-law has ever made in similar circumstances.

Two days after this ambiguous performance, Diana delivered a speech about her personal situation whose meaning was also unclear. She said that her plans for the future 'now indeed have changed' and that in the New Year she would be 'reducing the extent of the public life I have led so far.'

Yet this was not quite the abdication address that was billed in advance, and reported as such in some of the tabloids. Instead, Diana spoke vaguely of how she would be 'seeking a more meaningful public role with, hopefully, a more private life'. Her declaration resolves nothing - as was perhaps her intention.

TO FOLLOW Diana's progress over the past 12 months, as I have done, is to realise that the confusion comes from within. A year after her separation from the Prince of Wales, she simply cannot decide how royal she wishes to be - a fact betrayed to every welcoming party she faces, from superstars like Michael ('Hi George, how are you?' she asked him) to the humblest local councillor.

It is tempting to blame external forces for her predicament. On Friday Diana made the press her scapegoat, for intruding into her life 'in a manner that has been hard to bear'. The remark was sincere, but also misleading, for Diana's relationship with the press is riddled with inconsistency.

She was angered by the photographs of her exercising in a gym which were recently published by the two Mirror newspapers.

She was even angrier earlier in the year, when she chased photographers across a busy London street after they caught her leaving a cinema with her sons, William and Harry.

On the other hand, Fleet Street picture desks have become accustomed over the years to anonymous tip-offs, which have clearly emanated from Kensington Palace, about photo opportunities with Diana. A recent example, which puts the cinema fiasco in a less sympathetic light, was a day out with her sons at Thorpe Park.

Diana, in short, has not yet achieved the Garbo-esque condition of wishing to be alone, always. As ever, it all depends on the circumstances.

THE OTHER favourite scapegoat has been a supposedly malevolent palace. On Friday Diana was at pains to mention 'the kindness and support' she had always received from her parents-in-law. That did not stop some conspiracy theorists, including the Tory MPs Terry Dicks and Sir Nicholas Fairbairn, from claiming she had been systematically written out of the royal pageant by the court.

That is simply untrue. The small print of the Court Circular reveals that Diana has attended her full share of representative royal events since the separation. During the first two weeks of last month, for example, she could be found with the rest of the Royal Family at a memorial service in the Guards Chapel (2 November); at the Welsh Festival of Remembrance in Cardiff (6 November); at the state banquet for the King of Malaysia (9 November); at the return banquet hosted by the Malaysians (11 November); at the British Festival of Remembrance in the Albert Hall (13 November); and the following morning, at an Armistice Day ceremony at Enniskillen in Northern Ireland.

The conspiracy theory, in any case, assumes that Diana poses a threat to the monarchy; and from her in-laws' point of view, the moment of maximum danger has passed. There is plenty of evidence that Diana wished to humiliate Charles, most of it contained in the pages of Andrew Morton's book, Diana, Her True Story.

There is no evidence that she also wished to destroy the monarchy; but if that was her desire, the time to act was last year, when she was still notionally Charles's consort. Separated from Charles, she is denied the role of the injured wife, which proved so lethal to his standing in 1992.

That has not, however, been Diana's principal concern in the past few months. The feud with Charles, if not dead, has been buried for the time being. Her main preoccupation has been to mend fences with the Royal Family, including her husband. This Christmas, in a spirit of unity, she will be going to Sandringham, although she will sleep at nearby Wood Farm. It has gradually dawned on Diana that the separation raises far more questions about her status than it does about the position of her husband.

THE QUESTIONS begin with Diana's ambivalent image, poised somewhere between royalty and celebrity. It is the basis of her unique appeal, but since the separation it has also been the cause of her troubles.

Among the Windsor women, the most successful manipulator of her public image apart from Diana has been the Queen Mother. Her stereotypes, by contrast, have always been homely ones. In the 1930s, via a series of 'authorised' biographies, she was the perfect mother bringing up Lilibet and Margaret (actually the hard work was left to the governess, Marion Crawford). During the Second World War, she became the loyal wife, standing by her husband (and taking revolver practice, in case of German kidnap attempts). And in 1955, through a photo session with Charles and Princess Anne, subsequently published as Playtime at Royal Lodge, she launched herself as the nation's favourite grandmother.

Before Diana, the one Windsor princess who flirted with celebrity came to grief. 'The nightclub phase is almost over', the Princess Margaret Gift Book reported optimistically in 1953. Unfortunately for Margaret's public image it was not, and nor were her forays into show business.

Noel Coward witnessed one effort, an adaptation of an Edgar Wallace thriller called The Frog, performed at London's Scala Theatre by 'The Princess Margaret Set' and produced by the princess in question. 'One of the most fascinating exhibitions of incompetence, conceit and bloody impertinence that I have ever seen in my life,' Coward wrote in his diary. 'In the dressing room afterwards . . . we found Princess Margaret eating foie gras sandwiches, sipping champagne and complaining that the audience laughed in the wrong places.'

Diana was different - although she was not entirely free of the stage fever which gripped the young royals in the 1980s. In 1985, for instance, she danced with Wayne Sleep at Covent Garden - to the tune of Billy Joel's aptly-titled 'Uptown Girl' - explaining that it was a 'birthday surprise' for her husband, who watched with horror.

But Diana also had genuine star quality, which actually reinforced her image as the ultimate princess. It seemed a mystery, such was the power of Diana's mass projection. In essence, however, her allure was based on several simple facts.

She was the most beautiful British princess since the Duchess of Kent in the 1930s, and, at least for most of the 1980s, she was also remarkably silent. For a long time she made no speeches, beyond the briefest thank you messages; and since the 1985 interview she and Charles gave Sir Alastair Burnet, she has chosen not to repeat the experience. And then there was Diana's love affair with the camera which - according to last Friday's speech - has now been put on ice.

Until her separation from Charles, however, Diana and her admirers seem to have been blinded to the most important fact of all: that in the end, her appeal depended on being married to the heir to the throne. Without him, she had no claim to royal status as of right; and in this reduced condition, the artifice behind her public projection has lacked any mystery. If not quite a celebrity, she is also not quite a royal.

With hindsight - the favourite analytical tool of royal watchers - it is easy to see how Diana could have underestimated the importance of Charles. By the beginning of this year he had been totally humiliated. Morton's book had revealed him, unfairly perhaps, as callous and almost certainly unfaithful. The 'Camillagate' tape appeared to confirm a much-rumoured affair.

But, a year later, Charles is still heir to the throne, and Diana has been forced to moderate her attitude. The issue that has focused her mind is whether to agree to a divorce. A year ago that seemed inevitable; now she is not so sure.

Since the autumn, there have been several press leaks, again clearly emanating from Kensington Palace, that she wishes to remain married for the sake of the children. That may be true. It is also true that in divorcing Charles she would lose one of her two most important ties to the throne (the other being her sons). Once again, her royal aura would be diminished, perhaps irreparably.

AGAINST this background, and Diana's mournful announcement last Friday, her track record as a working royal since the separation is rather impressive. First, as she planned, she has retained a tight control of her schedule.

At Kensington Palace she has a private secretary, Patrick Jephson, who took her side in the civil war with Charles. He is a career courtier, and would certainly have helped draft her cri de coeur.

Otherwise, Diana's confidantes are all women. As was apparent at Wembley, they include her sister, Sarah, who was Charles's girlfriend in the late 1970s, and her eldest sister, Jane, a neighbour at Kensington Palace. It is customary to describe their relations as 'difficult', because Jane is married to the Queen's Private Secretary, Sir Robert Fellowes. However, there is no evidence that this is so.

Diana also still sees Carolyn Bartholomew, but her most intriguing friendship is with the Minister for Overseas Development, Baroness Chalker. She accompanied Diana to Nepal in March, her first overseas trip since the separation. They were a good double act. While Diana dispensed compassion, visiting a leprosy unit and a memorial to aircrash victims, Lady Chalker used the publicity to drum up support for her ministry's projects - not least among the cost cutters at the Treasury.

But despite this limited circle of friends, relations and advisers, it is Diana alone who has made the key decisions about her post-separation career. On the evidence of last Friday, she may conform to the image of a vulnerable, lonely woman. One of the many inconsistencies in Diana's character, however, is that she has also proved a formidable lobbyist on her own behalf; rather more effective, in fact, than her estranged husband, who recently complained about the lack of support he received from Whitehall.

Last summer, for example, a proposed trip to Zimbabwe became mired in red tape and Foreign Office inertia. The FO was reluctant to give the trip government backing, perhaps fearing that the palace would disapprove (civil servants can also believe in conspiracy theories). Diana requested a meeting with Douglas Hurd, the Foreign Secretary, and the tour went ahead with full Foreign Office support.

A further inconsistency is that Diana has a clear strategic sense of where her public interests lie. Since the separation, she has been far more successful than Charles in forging a distinctive identity as the 'caring princess'. The label invites cynicism, but there is no doubt that she sees herself as more than a token royal patron.

'She's got involved with causes at a time when they weren't fashionable', says Les Rudd, of the National Aids Trust, who also knows her from his time at the drug rehabilitation charity, Turning Point.

I witnessed the seriousness of Diana's commitment to her charitable work when she opened the St Nicholas Hospice in Bury St Edmunds last July. It is not easy to talk to a dozen terminally ill patients, watched by an audience of press photographers, television cameramen, radio journalists, local worthies and their wives and children. But Diana talked to the patients with dignity, charm and tact. An old woman, clearly very sick, showed her a locket, which Diana examined with unfeigned interest. To a young man who was painting, she joked about her own incompetence as an artist. Her visit meant a lot to these people - because of her beauty, because of her sympathy, because of her fame, but principally because she was the Princess of Wales, enveloped by the aura of royalty.

'To be a symbol, and an effective symbol, you must be vividly and often seen,' the much quoted Walter Bagehot wrote of royalty in 1874. It was a scarcely veiled criticism of the reclusive Victoria, and Bagehot had in mind the ceremonial functions which she refused to perform.

In the reign of Diana's mother-in-law, that is not enough. A few hours after her visit to the St Nicholas Hospice (a personal interest), it was Diana's symbolic duty to enter fully into the ordinary life of the workforce at Lucas Diesel Systems in nearby Sudbury. She was met by a rather less glamorous welcoming party than the one at Wembley, including the Injector Unit Manager, the Nozzle Unit Manager and the Filter and Delivery Valve Unit Manager. Her royal task, which she performed with aplomb, was to open the company's new Injector Manufacturing Cells unit.

But it is one thing to answer the call of royal duty on a summer's day in Sudbury; quite another to repeat the performance, year in, year out, against an unending backdrop of borough architects, district councillors and Rotary Club chairmen.

Diana's mother-in-law has been clocking up these engagements for more than 40 years. On 19 May, for example, she could be found at the BOC plant outside Grimsby. According to the meticulous schedule prepared by Buckingham Palace, at 10:23am she was 'observing the preparation of ultra-high purity gases for the semi-conductor industry' while the general manager gave 'a functional explanation en route'.

Beyond an abnormally high boredom threshold, the Queen's ability to stick to the task depends on utter self-

belief. And it is here that Diana's ambivalence about her identity - which she all but admitted in Friday's speech - undermines her capacity to last the royal course.

With time, she may be able to come to terms with the press - though she will be understandably suspicious of the promises made by the Sun and the Mirror on Saturday to respect her privacy. More questionable is whether she has the temperament to pay the price for retaining royalty's symbolic aura.

For the emotional nature which, on a good day, makes her such an effective patron of causes close to her heart, actually militates against effective performance of representative royal duties. On the royal trail it is not emotional candour, but inner conviction, which counts.

There are always spectres in the Windsor pageant, and in this context Diana's is her former good friend, the Duchess of York. Fergie, as she will be known to posterity, has been a royal outcast since her separation last year. In the manner of the Duchess of Windsor, she is no longer entitled to style herself 'Royal Highness', and her public engagements are not recorded in the Court Circular.

Fergie has tried hard to stay in business as a royal personage, via her charity Children in Crisis and her friends at Hello] magazine. The results have been mixed - a 'mercy mission' to Albania two months ago had little impact beyond the pictures which appeared (of course) in the pages of Hello].

The parallel between Fergie and Diana can only be taken so far. It is a long time since the heady summer night in 1986 when the two dressed as policewomen and attempted to crash Andrew's stag party. But Fergie does pose in an extreme form the question Diana has not yet answered: how to control her destiny - including her private life - while retaining the aura of royalty.

Richard Tomlinson's book on the modern monarchy, 'Divine Right: the inglorious survival of British royalty', is published next year by Little, Brown.

(Photograph omitted)