Harold Wilson tried to make Royal Family surrender land to pay their way

Attempts by Harold Wilson when he was Prime Minister to force the Queen and Prince Charles to surrender the revenues of their vast landed estates were thwarted by Buckingham Palace, government records have revealed.

The documents show Mr Wilson set up a secret review in 1966 because he was concerned about the rising cost of the monarchy to the taxpayer. The Palace had warned Mr Wilson that the value of the Civil List, allocated when the Queen came to the throne in 1952, was being overtaken by inflation, according to papers released by the Public Record Office.

In response, a team of Treasury and Palace officials produced a report showing the income from the Duchy of Lancaster and the Duchy of Cornwall could cover the rise. The estates, including farming land in the North-west and west of England as well as commercial holdings in London, do not pay tax on profits.

The Queen and the Prince of Wales retain the right to the revenue under a deal dating back more than 200 years when the rest of the Crown land was handed over to the state and the Civil List was set up.

One of the members of the review group, Sir William Armstrong, then head of the Civil Service, recommended radical changes that would amount to a "Scandinavian-style" monarchy, with the Royal Family paying for its own private living quarters and Buckingham Palace becoming a historic monument funded by the taxpayer.

The reforms won favour in Downing Street and a report at the time said that "payments from Lancaster and Cornwall revenues to a Civil List reserve fund" could be obtained either by voluntary agreement from the Queen and the Prince of Wales, or through legislation.

"This would entail the surrender for the remainder of the present reign by the Queen and Prince of Wales of their rights to the whole of these revenues, so that Parliament could legislate for their distribution," the report said.

But Lord Cobbold, the Lord Chamberlain and head of the Royal Household, vetoed the plan, telling ministers it would be "quite unacceptable" on constitutional and practical grounds to plunder the Duchies' revenues.

Eventually, a compromise, suggested by Lord Cobbold, was agreed which involved cutting the £60,000-a-year paid directly to the Queen's personal Privy Purse, while the taxpayer paid her staff's wages and expenses.