The dramatic move is a key option in a palace document on modernisation of the monarchy, due to be completed in the first part of next year. It comes in the wake of repeated calls for the Royal Family to modernise itself in the wake of the death of Diana, Princess of Wales.
Leaving the palace would not be a great personal blow to the Queen, who has always been said to dislike the large and soulless building, preferring to spend weekends at Windsor. Prince Charles, too, is thought to dislike the palace. The Queen's London base could move to St James's or Kensington Palace or to Clarence House, the Queen Mother's residence.
They have a suite of 12 rooms at Buckingham Palace, out ofabout 600 rooms in total, housing an administrative staff of about 850 and various members of the royal household.
A move from Buckingham Palace is likely to win immediate backing from the Government. Chris Smith, Secretary of State for Culture, Media and Sport, has already asked the palace whether it can make more of the priceless royal art collection, which includes works by Rubens, Canaletto, Vermeer and Leonardo da Vinci, available to the public.
The monarchy reform process, being conducted by the Way Ahead Group, consisting of family members and palace officials, has been accelerated in the wake of Diana's death. Last week's demonstration of openness by the Queen and the Duke of Edinburgh during their Golden Wedding celebrations is being portrayed as evidence of the Royal Family's wish to reform itself.
The new, more personal style has been encouraged by Downing Street, and the relationship between the Queen's private secretary, Sir Robert Fellowes, and the Prime Minister's press secretary, Alastair Campbell, is said to be good.
The Culture Secretary has been suggesting a series of possibilities for the royal art collection, including the loan of art works to regional galleries. But royal advisers see moving from the palace as an opportunity to make a significant gesture to underline the Royal Family's commitment to a smaller-scale, more modern operation. The move would help answer criticisms about the costs of the royals, and Prince Charles, regarded as a "moderniser", is likely to back the change.
If the palace is converted into a "living gallery" or "people's palace", it would be closed to the public for state occasions. Otherwise it would allow viewing of a fine art collection - much of it now hidden from public view - which includes masterpieces by Van Dyck, De Hooch, Michelangelo and Rembrandt, as well as sculpture by Canova.
Buckingham Palace has 45 acres of garden - large enough for parties which have entertained 9,000 guests at a time. Additions include lifts, swimming pool, a cinema and nuclear shelter.Reuse content