The butler didn't do it: how one man's 'terrible ordeal' ended in tears, hugs and vindication

It was a scene extraordinary even by the standards of this extraordinary case.

Sitting in the back of a Rolls-Royce on the way to a memorial for the Bali bombing, the Queen and the Prince of Wales were anxiously discussing a case at the Old Bailey which was about to turn into one of the most embarrassing episodes in the recent history of the Royal Family. During the journey last Friday, so the palace's account goes, the Queen told an incredulous Prince of Wales that she had met Paul Burrell a few weeks after the death of Diana, and he had told her he had taken some of her papers for "safe keeping".

Since the crux of the prosecution case was that Mr Burrell had taken the Princess's belongings without telling anyone, Prince Charles had little doubt about what to do. The police and the Crown Prosecution Service (CPS) must be told of the meeting.

Prince Charles called Scotland Yard on Monday and one of the highest-profile trials in recent times was effectively over.

In interviews with the police following his arrest Mr Burrell had mentioned his meeting with the Queen, but failed to detail the content of the conversation. It was, said his solicitor, Andrew Shaw, because of his "deep loyalty" to Diana and the Royal Family. Yesterday, deeply embarrassed police officers and Crown prosecutors muttered about " ambush defence".

It remains a fact, however, that the Scotland Yard team made no attempt to find out what went on when the Queen spoke to Mr Burrell, and the CPS had also failed to pursue the conversation.

The denouement of this cock-up, conspiracy or combination of the two began with the prosecutor, William Boyce, QC, asking Mrs Justice Rafferty for a Public Interest Immunity (PII) certificate on Tuesday morning.

Yesterday at 10.54am, after days of speculation, the judge said the issue of the PII had been resolved, and she adjourned the hearing briefly.

Lord Carlile, Mr Burrell's QC, told his client with a smile that he was about to be cleared. The butler burst into tears and hugged him. As he emerged from the court to face the cameras, the relief was obvious. "The Lady has come through for me, the Queen has come through for me," he said. The collapse of the trial may have been sudden but the "terrible ordeal" of Paul Burrell started long before, sparking the first new draft of the extraordinary tale of Diana and the man she called her "rock". For Mr Burrell, the case started as it ended, bleary-eyed, as police came knocking on his door at 6.50am on 18 January, 2001.

Officers from Scotland Yard's special inquiry team spent 14 hours searching his home in the Cheshire village of Farndon. They lifted floorboards and took away dozens of bin-liners crammed with clothing, ornaments, paper and jewellery.

No photographic or video evidence was taken at the time. Among the mementoes the officers missed was a kingfisher ornament, a wedding present to the Prince and Princess of Wales, from the former US President Ronald Reagan.

The officers were forced to borrow a torch from the local force to look into the loft, where most of the haul was found. The officer in charge of the inquiry, Ms de Brunner, did not go up because she was scared of heights. What they found was enough for Mr Burrell to be held for 16 hours before being released on police bail while investigations continued.

The police now found themselves in a quandary. Their investigation went to the heart of the Royal Family with, at its centre, a man privy to embarrassing sexual indiscretions that had rocked the House of Windsor. It was time to get the senior Royals on board.

Before any decision was made on whether to charge Mr Burrell, a delegation from Scotland Yard met in secret with Prince William and Prince Charles and their legal advisers at Highgrove on 3 August last year to gauge their support for what might well become a messy trawl through the family's affairs.

Prince Charles dreaded the prospect of revisiting his crumbling marriage. He was reported to have been assured that efforts would be made to spare him and his sons from the witness box. It was pointed out that members of the Royal Family could still be called by the defence.

However, what he was told during the two-hour meeting with Commander John Yates and Chief Inspector Maxine de Brunner changed his mind.

The devastating details gathered by the police meant that he was now gunning for Mr Burrell because of the overwhelming case outlined by the officers. But he was, as the trial was to hear, "grossly misled".

The police told him they had uncovered significant evidence against Mr Burrell during a £1.5m investigation that had included posting undercover detectives on the QE2 to listen to Mr Burrell's after-dinner talks.

As a result, the officers suggested that he was selling Diana's possessions abroad. His bank balance had gone up and an "independent source" had shown photographs of he and several members of staff dressing up in the Princess's clothing.

The information, however, was wrong. The police had no evidence of anything being bundled up and catalogued for sale abroad even though it would have made a fortune with foreign collectors. There were no photographs.

The police did not know that Mr Burrell had written a successful book and was able to command £1,000 for after dinner speeches. Even when they did know, they never told Prince Charles.

The princes recognised virtually none of the haul from Mr Burrell's house when they were presented with a list of items, according to royal sources. Police who carried out the search told how the home was crammed with CDs and LPs signed by Diana, her designer clothing and personal letters from "Mummy" to Prince William, addressed to "My darling Wombat", his pet name.

Ms de Brunner said she had not seen Charles since the meeting to correct the error. But Lord Carlile QC said it would not have been difficult for her to have telephoned Prince Charles's solicitor.

"I could have done," she said. "But you did not," said Lord Carlile. "No," she replied.

The judge, Mrs Justice Rafferty, intervened to ask: "Is it right that you allowed the two princes to remain under that misconception?"

"Yes," said Ms de Brunner.

The spotlight is now likely to turn to her handling of the case. An ambitious detective, she was a key driving force behind the investigation. She was said to have threatened to make a public statement of protest when it appeared obstacles were put in her way.

However, having misled the princes, the misconception remained for more than a year until 22 October, little more than a week ago, when she was cross-examined by Lord Carlile. To find out for himself what had happened, a meeting was set up between Prince Charles and Mr Burrell, on the same day as the Highgrove summit, at a friend's home in Tetbury, Gloucestershire.

However, as Mr Burrell was driving from his Cheshire home for the meet, Prince Charles suffered a fall playing polo and was taken to hospital. Mr Burrell received the news on his mobile phone, turned the car around and drove home.

If there was any prospect then of Mr Burrell telling Prince Charles of the conversation with his mother, it was missed. Thirteen days later, on 16 August, he answered bail at West End Central police station in London and was charged with stealing 342 items belonging to Prince Charles, Diana and Prince William.

The charge list was later scaled down to 310 but it still amounted to the same end result: it was to be a "trophy trial" his solicitor Andrew Shaw said. It went ahead despite a 39-page statement "accounting for every item" being handed over to police on 16 August.

On 29 November, Mr Burrell was committed to the Old Bailey to stand trial and the case got going on 14 October because of a delay for the Queen's Golden Jubilee celebrations.

However, part of the key to yesterday's debacle stemmed from the careful defence preparations for the trial.

As well as the 39-page statement, they handed over a detailed defence statement to the prosecution in February 2002, according to the Crown Prosecution Service. It said both alluded to the meeting with the Queen.

Scotland Yard demurred. It said the meeting – requested by Mr Burrell – was not mentioned in the 16 August statement to police. However, the fact remained that nobody spoke to the Queen.

It only became clear after the Queen's Rolls-Royce conversation came to light and as the defence team were preparing to provide their "long, detailed and very interesting" evidence.

The defence was expected to call confidants of Diana, threatening to add to the courtroom revelations of a love token from her former lover, James Hewitt, and the stormy relationship with her family.

The collapse has inevitably raised questions over the timing of the Queen's intervention. Mr Burrell will now never take the stand, much to the relief of the Palace.

Suspicions were raised over the number of successful applications by the prosecution to withhold evidence from the jury through the PII certificates, normally used in trials involving informants or matters national security.

The Old Bailey was also rife with rumours including unsubstantiated claims that Mr Burrell had a cassette that included further royal revelations.

Earlier this week, a senior legal source said: "It's very significant. The queen arrives back three days after the trial started. Don't forget Burrell was her footman for 10 years and he knows a lot of things. I suspect we are getting very close to the sovereign."

Buckingham Palace yesterday dismissed any suggestions that the sudden halt was an attempt to suppress any further embarrassment.

Asked whether the case had been halted at the Queen's request, the Palace said: "Absolutely not. There is no question of the Queen interfering in due legal process."

THE PRINCES

They have become known as the "Wombat Letters" – at least 15 cards and letters sent by Diana to her eldest son using her pet name for him, which were found in Mr Burrell's home. The former butler said he kept them out of fear that they would be shredded when Diana's Kensington apartments were cleared after her death, and that he intended to return them. They revealedthe closeness between Diana and William as she tried to give her sons as normal a life as possible within the confines of the Royal Family. One card, showing a bear clutching a balloon, was held up for the jury to see. The message was not revealed other than to say that it began "Dear Wombat". Each was sent to Prince William at his school, where he hoarded them away in his tuck box. Clair Southwell, an aide to the Prince of Wales who was put in charge of Diana's correspondence after the Princess died, said: "Prince William was always very conscientious about where his letters were."

THE LOVER

On Day Four of the trial, the court was suddenly told of a large wooden box, where Diana kept her "most sensitive possessions" which went missing after her death. Among various knick-knacks and papers was the signet ring of James Hewitt, the Guards major with whom she had a five-year affair.

For Dianaphiles, it was proof that the Princess, spurned by her husband in favour of his lifelong love, had clung to moments of happiness with the man who later told all in a publishing deal and tried to sell her love letters. Her family was desperate to get all personal possessions – and knowledge of Diana's relationships – under lock and key. Scotland Yard had a call from Lady Sarah McCorquodale, Diana's older sister, asking it to see if the box was in Mr Burrell's house in Cheshire.

Lord Carlile QC, defending the former butler, asked an officer who had searched Mr Burrell's home: "You said to Mr Burrell that Lady Sarah had asked you to retrieve a box of personal documents and that if the box was produced that you would not search the house?"

The box, and its contents, were never found.

THE BROTHER

To him, the older sister who became a superstar was "Duch". To her, he was "Carlos", the brother who berated the Royal Family at her funeral for its behaviour towards her.

But the relationship between Diana and Earl Spencer was by no means the one of mutual understanding and generosity that most assumed it was. Letters read to the Old Bailey jury revealed that the pair had a catastrophic falling out just six months after her separation from Prince Charles, in which her brother refused her a home on the family's Althorp estate for fear that her status would disrupt his life. The response from Diana was frosty.

THE MOTHER

Propped on a cane, with a voice like sandpaper, Frances Shand Kydd was a key prosecution witness. As one of the executors of her daughter's will and a frequent visitor to Kensington Palace, she had got to know the defendant extremely well. But it was less her knowledge of Mr Burrell and more her relationship with Diana that captivated the court. She described her daughter as "tempestuous" and revealed that, for the last four months of Diana's life, the pair had not exchanged a word after arow. "I would suggest it was normal family behaviour," she said.