Smith: is he an unreliable witness or a servant with a story to tell?

The statement issued by Clarence House on Thursday evening essentially identified George Smith as the man who claims to have seen Prince Charles in a serious incident.

The alleged witness is described as a "former Royal Household employee who, unfortunately, has suffered from post-traumatic stress disorder and has previously suffered from alcoholism following active service in the Falklands. He has, in the past, made other unrelated allegations which the police have investigated, and found to be unsubstantiated."

Mr Smith served as a corporal in the Welsh Guards during the Falklands War, and was on board the troop ship Sir Galahad when it was bombed by Argentine warplanes. He had been a patient at the Priory Clinic, receiving treatment for depression in 1995. He was administered heavy medication in that period, and returned to the clinic to be treated for drinking problems. He has also had criminal convictions on alcohol related charges.

Last year in a separate claim Mr Smith alleged he was raped by a fellow member of the Royal Household staff, and that the same person had attempted a second rape several years later. He maintained that he told Diana, Princess of Wales about the attacks as well as another serious allegation of a sexual nature, and that she taped the conversations.

The so-called rape tapes were mentioned at the trial of the former royal butler Paul Burrell on charges of theft last year. After the publication of his book on 27 October, there were reports that the Princes William and Harry feared Mr Burrell may make further revelations about the tapes.

Mr Smith's allegations of rape were the subject of two internal inquiries by the Palace, which concluded they could not be substantiated. Two police investigations also failed to find evidence on which to bring criminal charges. The allegations were first made public by Mr Smith last year in The Mail on Sunday. It is now seeking to lift an injunction obtained by the Palace so that the newspaper can report the unrelated allegations made by Mr Smith about the Prince of Wales.

Mr Smith was seconded to Prince Charles's staff from the Welsh Guards in 1986. He claimed that he became a trusted member of staff, even being entrusted with the task of arranging Charles's meetings with Camilla Parker Bowles.

In the The Mail on Sunday in November last year, Mr Smith said the alleged assault took place in 1989 after a colleague invited him for Sunday lunch at his London home.

After a meal accompanied by beer and champagne, he fell asleep on a settee "insensible from drink", and woke to discover he had been raped.

Mr Smith, who is married with two children, did not tell anyone, including his wife, because, he claimed, he would have lost his livelihood.

In 1995, during a visit by Prince Charles to Egypt, the same man allegedly attempted to rape him again while he was asleep at the British embassy. The attack, Mr Smith said, left him deeply traumatised.

At the same time Mr Smith's marriage ended. He was unable to cope with work due to the combination of problems. He was shown sympathy by the Prince's staff and treated at the Priory Clinic at Palace expense.

Mr Smith said he spoke to staff at the clinic about how disturbed he was by the Falklands experience, but did not mention the alleged sexual assaults.

Mr Smith claimed that Diana visited him at the Priory twice and asked him to call on her at Kensington Palace to discuss his troubles. Mr Smith told Diana about the assaults, and on her second visit to the Priory she taped the claims, promising they would not be revealed to anyone, he said.

However, the Palace subsequently launched an internal investigation, organised by Fiona Shackleton, then Prince Charles's principal lawyer.

A report by Sir Michael Peat, the Prince's private secretary, says Ms Shackleton described Mr Smith's claims as "very serious" and merited a thorough inquiry.

According to the report, the Prince told Ms Shackleton that Mr Smith should be dismissed, but that he should be "properly looked after". He also asked her to tell Diana to "stop interfering". Prince Charles also stated that he did not believe the alleged attacker was capable of such an act.

Sir Stephen Lamport, the Prince's deputy private secretary, wrote to Ms Shackleton asking if an agreement could be reached with Mr Smith to "avoid an investigation".

Ms Shackleton, according to the Peat report, believed Mr Smith had St James's Palace "over a barrel". Mr Smith told police that Ms Shackleton "wanted to pay me a settlement to keep my mouth shut".

Mr Smith eventually agreed to a £38,000 pay-off, almost three times the sum he would have received if he won a claim for unfair dismissal.

Ms Shackleton was so discomforted by her experience, the report noted, that she told Lady Sarah McCorquodale, Diana's sister. " I was asked to make it go away. It was one of the lowest points in my professional career."

The Peat report concluded that Ms Shackleton's initial advice to investigate the rape allegations was "entirely reasonable and proper" and other members of St James's Palace "should not have treated the matter so dismissively".

But Ms Shackleton's inquiry and the Peat report concluded that Mr Smith's allegations were unsubstantiated.

Mr Smith did not follow up the first complaint he made to police. But police investigating the claims of theft against Mr Burrell interviewed the former valet, and the Crown Prosecution Service concluded there were insufficient grounds for prosecution.

Mr Smith's veracity is a matter of debate among current and former members of the royal staff. Many point out his psychological and alcohol problems as marks of his unreliability. They also ask why he failed to mention the alleged rape for six years, and then confided in Diana when she was known to be seeking pejorative information on those close to Prince Charles.

Six years on: Diana's legacy

By Cahal Milmo

THE DIANA CAMP

DIANA, PRINCESS OF WALES: She fought a guerrilla publicity war against her former husband, from her unofficial co-operation with the biographer Andrew Morton to her Panorama interview. She feared a security services plot to kill her.

PAUL BURRELL, 45 Ex-butler to the Princess: His revelations during his abortive trial on theft charges and in his memoirs threaten to become the nemesis of the House of Windsor.

MARK BOLLAND, 37 Ex-deputy private secretary to the Prince: Gave counsel on public relations but has turned against his former master, describing him as "very, very weak" for not stopping the prosecution of Mr Burrell. He said the Prince lacked "self-belief" and "inner strength".

CHARLES SPENCER, 37, Brother of the Princess: Earl Spencer revealed last year that Charles had spoken to him only once since Diana's death and that he believed Princes William and Harry may ultimately move away from the Windsors.

PETER SETTELEN, 52 Former voice trainer to the Princess: In a legal battle with Scotland Yard and the Princess's estate over the ownership of videotapes made in tutoring sessions, on which she is claimed to give a candid account of her marriage and make a number of confessions.

THE CHARLES CAMP

PRINCE CHARLES, 54: Despite the existence of a private office run by professional royal servants, critics say the Prince gives too much influence to a small number of friends and advisers and is naïve on matters of public presentation.

SIR MICHAEL PEAT, 54 Private secretary: After 13 years as a senior courtier to the Queen, came to prominence last year when he headed an internal inquiry into claims of wrongdoing at St James's Palace. Critics said his report raised more questions than it answered.

MICHAEL FAWCETT, 40 Former valet: Widely seen as the Prince's closest aide until he left in March to become an "events consultant" for the Prince. His activities in helping to dispose of presents given to Charles earned him the title "Fawcett the Fence".

NICHOLAS SOAMES, 55 Friend: A close friend of the Prince since they were boys, Mr Soames is the longest standing member of Charles's "kitchen cabinet".He defended the Prince after Diana's Panorama appearance.

FIONA SHACKLETON, 46 Lawyer: Until last year, she was the Prince's principal lawyer. She is still retained for some legal matters but recently their relations have appeared strained.