William's Millions at Risk but Brown Backs Charles the 'Taxdodger'; Prince on Collision Course with Parliament but He Gets a Surprise New Ally: Gordon Brown

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Byline: JONATHAN OLIVER

PRINCE WILLIAM and Prince Harry could be forced to pay millions of pounds in inheritance tax under new rules being proposed by MPs.

A damning Commons inquiry into the finances of Prince Charles's Duchy of Cornwall estate will this week call for an end to 'tax fiddles' that allow his family to escape the death duties that cripple many ordinary people.

And not only is the [pounds sterling]505million estate currently exempt from inheritance tax, but it also avoids capital gains tax and corporation tax, which has to be paid by any normal commercial organisation.

The powerful Commons Public Accounts Committee will recommend on Thursday that Charles should pay tax at the same level as his subjects and will try to force him to open his books to public scrutiny for the first time.

But Charles has found a surprising ally in his battle to keep his perks: Chancellor Gordon Brown.

The Mail on Sunday can reveal that the Chancellor and his wife Sarah hosted a private dinner last week for the Prince and the Duchess of Cornwall. A Whitehall source told The Mail on Sunday: 'Decisions on Royal finances are made by the Treasury. Gordon has made it clear to Charles that there will be no changes without the Prince's consent.' Traditionally, Mr Brown has been regarded as more Leftwing and anti-Royal than Tony Blair. But as the Chancellor prepares himself for the Labour leadership, he is keen to demonstrate that the Monarchy has nothing to fear from him.

The reforms proposed by MPs would mean that William and Harry could be liable for an inheritance tax bill of [pounds sterling]202million. They will inevitably put Charles, who is determined to resist any assault on his cherished independence, on a dangerous collision course with Parliament.

A source close to the inquiry told The Mail on Sunday: 'Charles is trying to have it both ways. He wants to continue being exempt from certain taxes and at the same time he wants to avoid Parliamentary scrutiny. It cannot continue this way for ever.

'There is no getting away from it - it is a tax fiddle. There was unanimous agreement among the MPs and the report will pull no punches.' Unlike Government departments, Clarence House has no binding duty to open its books to the National Audit Office, the public spending watchdog.

The Duchy provides Charles with an income of [pounds sterling]13million a year to pay for his own burgeoning costs. …