Public should own all the Queen's palaces, say Fabians

The Queen should be stripped of ownership of Crown property - including Buckingham Palace and Kensington Palace - and forced to pay inheritance tax on all her private lands, an explosive report by the Fabian Society will say next month.

The Queen's priceless collection of paintings, prints and furniture and the royal parks should be given to the public, with most of the Crown Estates, which include the Tower of London, Hampton Court and Whitehall.

A year-long inquiry by the Fabian Society - to which the Royal Family agreed to contribute - concluded that the Queen's personal wealth should be restricted to her estates at Sandringham and Balmoral, her shareholdings and her personal belongings. Castles, pubs and her portfolio of commercial property - including buildings in Regent Street - would be transferred to the state.

But the Queen would face a far higher tax bill under the proposals by the Labour-affiliated think-tank.

The voluntary deal struck between the Queen and John Major, when he was Prime Minister, to pay income tax should be scrapped, the Fabians will say, and the Queen should have a legal duty to pay tax on the same basis as any other citizen. That would include inheritance tax, from which she is currently exempt, meaning that she did not have to pay a levy on the estate of the Queen Mother.

The report is expected to outline plans to make property, land and objects which the monarch has acquired solely because she or he is head of state, the "property of the nation". It will call for an audit of all royal wealth to establish exactly what the Queen and the Prince of Wales own, and is expected to argue that the "blurring" between the private and public aspects of the monarchy "is no longer supportable for a modern head of state".

The public should be given greater access to the monarchy's property - including the right to look round the public parts of all royal palaces, to walk on royal land and to see the royal collection of paintings, prints and tapestries, the Fabians say.

The report, now in its final draft form, is also expected to call for the minor royals, such as the Earl of Wessex, Prince Edward, to have a reduced role with many of the accoutrements of office, such as the Royal train, whittled away. This would make the British monarchy less extravagant and more like the less ostentatious royal families of Europe.

The Fabians will not call for the abolition of the monarchy, but they are likely to question the monarch's role as head of the Church of England in 21st- century multicultural Britain.

They are also likely to say that a modern monarchy must be based less on the principles of noblesse oblige and consider the public citizens, rather than "subjects".

The model drawn up by the Fabians would severely reduce the paper wealth of the monarchy. The Queen is worth an estimated £1.7n, including revenue from property, shareholdings and land.

A vast portfolio of property in the Crown Estate - including Buckingham Palace - is owned by the monarchy but is paid for by the taxpayer. Some parts of the estate, such as Windsor Castle, generate revenue that goes back to the Treasury, but it costs millions of pounds a year to keep up.

A "list" of royal assets should be drawn up by the Government, similar to the audit of government property organised by Gordon Brown when Labour came to power.

The conclusions of the report, which are to be finalised in the next few weeks and discussed with members of the Royal Household, will be welcomed by those MPs who have long called for curbs on the monarchy's wealth.

"The rules that apply to the royal family are labyrinthine, created centuries ago and are hopelessly out of date," said Norman Baker, MP for Lewes. "They lack accountability and are based on psycho-feudal arrangements."