Lord Spencer bitterly denied a report on Channel 4 news that the Queen was reported to have stipulated that the princess's body should not go to any of the royal palaces and that she should have a private funeral.
Last night Lord Spencer said: "To suggest that there were divisions between royal officials and me in the period after my sister's death is so far from the truth as to be laughable.'' A spokesman for Buckingham Palace said the story was "just mischief making ... frankly the whole story is rubbish."
The controversy served as a distraction to plans to find a suitable permanent memorial to the princess. There were calls yesterday for Heathrow airport to be re-named and for a children's hospital in her honour to be built in place of the millennium dome.
As tens of thousands of pounds flooded in to the Diana, Princess of Wales, Memorial Fund, the debate began over other appropriate memorials.
Lindsay Hoyle, Labour MP for Chorley, wrote to BAA, which operates Heathrow, urging a name change which would echo Charles de Gaulle, Paris, and John F Kennedy, New York - airports whose names honour national heroes. William Hague, the Conservative leader, backed the idea.
The Tory MP Sir Teddy Taylor called for the cancellation of the millennium dome at Greenwich and for an international children's hospital to be built on the site instead. He said he had received hundreds of letters of support for the idea.
A Downing Street spokesman said the special committee headed by the Chancellor, Gordon Brown, which will examine memorial ideas, would take cross-party soundings on all suggestions. "Nothing is ruled out and nothing is ruled in."
Donations poured into the memorial fund. Around 350 mourners an hour have called a 24-hour credit card line to make pledges, and extra British Telecom volunteers have been drafted in to help.
The average size of each donation was pounds 20, making pounds 7,000 an hour and pounds 168,000 a day. These sums supplement thousands of cheques filling post bags to Kensington Palace, said Kate Day, of Mishcon de Reya, the law firm which acted for the princess and which will administer the fund.
Only two trustees - Anthony Julius, the princess's lawyer, and Michael Gibbins, her private secretary - have been appointed for the fund so far.
The fund will be boosted tonight by proceeds from the game between Fulham football club, whose chairman is Mohamed Al Fayed, and Plymouth Argyle.
Mr Fayed, whose son Dodi also died in the crash, will make his first public appearance since her funeral tonight. A lone piper will play a lament, which will be followed by a minute's silence.
Thousands of mourners carrying flowers continued to arrive at Kensington Palace last night, while there was a two-hour queue to sign the books of condolence. Workers will begin to remove the flowers from Kensington and Buckingham Palaces on Thursday, keeping the messages for the princes. Surviving blooms will go to the elderly and hospitals, and the rest will be composted.
Friday's Proms performance of Verdi's Requiem will be a joint tribute to the princess and Sir Georg Solti, who was to have conducted it and who died, aged 84, last Friday.Reuse content