Prince braced for report on Burrell affair

The Prince of Wales was last night bracing himself for more accusations of cover-ups, sexual impropriety and bitter internal divisions in his household with the publication later this week of the internal report into the collapse of the Paul Burrell trial.

Despite being condemned as a whitewash even before its release, the 100-page report by Sir Michael Peat, the Prince's private secretary, is certain to revive the controversies surrounding the case when it is published on Thursday.

There was speculation yesterday about the future of Michael Fawcett, one of the Prince's most trusted aides, who has been linked by some reports to allegations that royal gifts were passed on to staff or sold on in contravention of official guidelines.

As well as examining the disposal of gifts, Sir Michael has looked at the background to the collapse of the prosecution against Paul Burrell, former butler to Diana, Princess of Wales, and the allegations that an internal inquiry into claims of the gay rape of a palace employee by another member of the Royal Household was mishandled.

Parts of Fleet Street were said to be gearing up for a bidding war for Mr Fawcett, who has been with the Prince for 15 years and is believed to have been privy to many royal secrets, should he be forced to leave St James's Palace as a result of the report.

There were suggestions at the weekend that Mr Fawcett's story was being valued at up to £2m, although he has, alongside other members of the Royal Household, signed a confidentiality agreement. Mr Burrell was paid £400,000 by the Daily Mirror newspaper for his story, a price many believe was below its worth on the open market.

The Prince is keen to keep Mr Fawcett, who is said to be refusing offers of a "departure package". This will put both men in conflict with Sir Michael, who will be anxious to deflect accusations of a whitewash. Although he has a reputation as a moderniser and a cost-cutter in royal circles, the former keeper of the privy purse is caught between saying enough to prevent pressure for a further external inquiry and revealing matters that would cause long-term harm to the Prince.

There were fears last night that Sir Michael's report may not resolve some of the key unanswered questions surrounding the Burrell affair – in particular why it was not until halfway through the trial that the Queen recalled having a conversation with Mr Burrell in which he told her that he was keeping some of the Princess's property, the trigger for the trial's collapse. Edmund Lawson QC, the barrister who has assisted Sir Michael, is reported to have become pessimistic about the outcome of the report.

However, Sir Michael is expected to make a number of recommendations for tightening procedures over the disposal of gifts to royal households.

* St James's Palace said last night that it would consult the Press Complaints Commission over pictures of Prince William in yesterday's News of the World showing him at the University of St Andrews in Scotland, where he is studying.