Firm in legal row with Diana Fund says charities should get promised money

The American firm suing the fund set up in memory of Diana, Princess of Wales, has said it will not claim any money already promised to charity.

The memorial fund has been criticised for freezing £10m of promised payments to its beneficiaries after the Franklin Mint began its multimillion-pound action alleging that the fund had mounted a "malicious prosecution" against it.

In a statement yesterday the company said it was not claiming any of the £10m. "The fund's trustees should honour their promises and release these monies immediately to the groups that so desperately need them," it said.

The memorial fund said the money would remain frozen until there was formal notification of the Franklin Mint's position through lawyers.

The action stems from an unsuccessful court attempt by the memorial fund in 2000 to stop the Mint producing Diana mementoes. In addition to the £10m already promised, the fund has £46m in reserve which it claims would have to be used in the upcoming legal battle before trustees had to dip into their own pockets. The fund said it was "understandable" the trustees wanted to protect their interests because they had no idea what the maximum damages would be or how long it might be before the case was resolved.

The decision to freeze the £10m caused a rift among the trustees with 13 of 16 wanting to honour the fund's commitments. The other three trustees are Lady Sarah McCorquodale, the princess's sister; Michael Gibbins, Diana's former financial controller; and John Reizenstein, former managing director of Goldman Sachs.

The Franklin Mint said: "Because three trustees of the fund seem unable to resist the temptation to try to protect themselves regardless of the impact their actions may have on others, the Franklin Mint has decided to limit its claim for damages to fund assets not yet committed to any charities."

It said it wanted the fund's trustees and lawyers to be held accountable for their actions. "They pursued us with an unjustified and reckless lawsuit aimed at intimidating us and other legitimate businesses into paying them royalties."