Palace Gifts Inquiry Clears Charles and Staff of Blame; NEW ROLE LOOKING AFTER PRIVATE PROJECTS FOR FORMER VALET TRUSTED BY PRINCE

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Byline: ROBERT JOBSON

PRINCE Charles and his staff will be cleared of any "deliberate wrong doing" in the St James's Palace inquiry.

But the detailed report into the collapse of the Paul Burrell trial, claims of a cover-up of a gay rape and the sale by servants of royal gifts will concede mistakes were made when it is published on Thursday.

Among the recommendations by Charles's Private Secretary Sir Michael Peat, who led the four-month internal investigation, is the establishment of a royal gifts register, similar to the one MPs have to complete, in an attempt to end the widespread culture of Palace employees selling them for personal gain.

Crucially no one will be punished and Palace insiders fear the internal investigation will be dismissed as a whitewash, further damaging Charles's image. It has emerged that Charles is determined to stand by his trusted personal assistant Michael Fawcett - dubbed "the Fence" over allegations that he sold unwanted gifts and took a percentage of proceeds - despite high-level pressure to axe him.

Informed sources say Charles will offer him a sizable retainer to work on private projects, away from the daily pressure of the office where he has powerful enemies. His decision to stand by Fawcett, even though he has been cleared, will fuel further criticism.

One informed source said: "There is no evidence of Michael doing anything wrong. In fact the Prince of Wales is totally convinced that Michael has acted entirely properly throughout."

Although the report will concede there are "lessons to be learned" and accept that mistakes were made, its findings will stress there was no proof of intent. Charles, who was the last person to be interviewed in the investigation this week, will be shown the full report before it is published. But it has been a frustrating process with many witnesses unwilling to compromise themselves by giving evidence.

Some refused to be interviewed. As a result, another public inquiry, headed by a judge with wider powers, has not been ruled out. A senior Palace source said: "Sir Michael Peat has been in a no-win position from the moment he took this on. He has tried to make it whiter than white but has has been seriously hampered because many key people have refused to co-operate. …