A portrait of Charles as thrifty voice of the people

The heir has been called profligate and interfering. Yesterday he launched his defence. Robert Verkaik weighs the evidence

The Prince of Wales was forced to defend his increasingly controversial role as a "campaigning" heir to the throne yesterday on the day Clarence House revealed his private income had risen to record levels.

Aides to Prince Charles said the £17.161m generated from his private estates was evidence of his "prudent" and "steady" financial management in the face of a biting recession. He had also found the time, they said, to write 1,869 letters to ministers, property developers and members of the public.

His advisers mounted a robust defence of his prolific letter-writing, including one which had led to the withdrawal of an unpopular plan for the redevelopment of Chelsea Barracks in west London.

Sir Michael Peat, Charles's principal private secretary, said the Prince was expressing the views of local residents when he intervened over the multimillion-pound property development. The letter was referred to in a court case last week when the judge described it as both "unwelcome and unexpected".

Developers Qatari Diar Real Estate withdrew their planning application for the prestigious site after Charles wrote to the chairman, who is also the Prime Minister of Qatar, saying his "heart sank" when he saw the design.

But Sir Michael said Prince Charles was voicing the views of "ordinary people" after concerned residents contacted him. He said: "It is part of the Prince of Wales's official duties to encourage and advise and warn and to make sure the views of ordinary people that might not otherwise be heard receive some exposure." Lord Rogers, the architect of the design, said last week that Charles's determination to express views on his design for Chelsea Barracks was "wrong".

Last night constitutional experts were divided over the growing interventions of the Prince of Wales.

Professor Robert Hazell, director of the constitutional unit at UCL said: "This is a small constitutional innovation. The constitution is silent on the role and responsibilities of the deputy head of state. But I would think all constitutional experts would agree that he can't behave like this when he is sovereign because the sovereign has to be impeccably neutral."

Vernon Bogdanor, professor of government at the University of Oxford, also said as heir to the throne, Prince Charles must not venture into controversial party politics. But, he added, "He has the duty and right to inform himself about government policy and he is probably the best informed ever heir to the throne."

Professor Bogdanor said he did not think that Prince Charles's letters to the Qataris had threatened the constitutional position of the deputy head of state. "He has expressed himself on matters of Shakespeare, alternative medicine and architecture, but I don't think any of these have been matters of controversial party politics."

The Duchy of Cornwall accounts revealed Prince of Wales's private income increased by more than 4 per cent last year but his funding from the taxpayer was almost halved, the Clarence House accounts showed.

Sir Michael said that the reason for the dramatic fall in taxpayer funding for the Prince was due to lower spending on overseas travel. The figures also showed that the "net cash surplus" available to the Duchy of Cornwall – the landed estate given to the heir to the throne – increased to £229,000 from £157,000 the year before.

But Sir Michael declined to disclose the value of further reserves held by the Prince which would have given a clearer picture of the state of the royal finances.

Official expenditure fell from £12,513,000 to £10,723,000 in the last year. The Prince paid almost 13 per cent more tax in the last year, with his bill rising from £3,093,000 to £3,484,000.

Asked whether the global economic downturn had affected the way the Prince's household had been run during the last year, Sir Michael said: "Yes, absolutely. We are living in the real world."

He emphasised the Prince's prudent financial management – in contrast with that of the banks and others who made huge profits during the economic boom years. "The Prince has tried to run his household and the Duchy of Cornwall in a constant, steady way," he said. "In the heady days when banks and property companies were making vast returns, we didn't make vast returns. His approach has always been one of steady progress rather than dashing to the heights and then plunging to the depths... During the recession we're able to continue employing people rather than putting them on the dole, and to pay more tax rather than less tax."

The Prince employs the equivalent of 124 full-time staff, who perform roles ranging from private secretaries and financial and charities administrators to chefs, kitchen porters and gardeners. His expenditure on these staff rose slightly from £6,244,000 to £6,303,000 in the last year.

But spending fell in other areas, including travel and subsistence (from £308,000 to £229,000), external consulting and professional fees (from £171,000 to £141,000) and stationery and office equipment (from £218,000 to £186,000). The entertainment budget showed a healthy saving as well with guests opting for more informal buffets and finger bowl functions serving vol-au-vents and sandwiches rather than costly sit-down dinners.

The anti-monarchy group, Republic, said it was time to cut all public subsidies. Its campaign manager Graham Smith said: "Clarence House tries to justify this by telling us the royal couple have performed 755 'engagements'. We have it in writing from Clarence House that a typical engagement lasts around an hour. So that's an average working week of seven hours each from Charles and Camilla."

He added: "Without even counting the cost of security we're looking at a bill of more than £2,000 an hour. That's an outrageous waste of taxpayers' money. When public spending is being slashed across the board we see the Government is still spending millions on Charles and Camilla, on security, transport and accommodation. It's time to cut this bill to the taxpayer to zero."

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