Staff at Buckingham Palace will have to forgo their Christmas party this year after the Queen decided an "ostentatious" celebration is inappropriate in the economic climate.
A decision has not been taken as to whether the 600 members of the Royal Household will also miss out on traditional Christmas pudding and a personal gift from the Queen.
The news was broken to staff by the Lord Chamberlain, head of the Royal Household, in an email on the Buckingham Palace intranet.
A Palace spokesman said: "The Queen is acutely aware of the difficult economic circumstances facing the country. It was decided it was appropriate for the Royal Household to show restraint and therefore not hold the party this year."
The Queen had to plead poverty this year after her aides claimed she did not have funds to repair her crumbling palaces. The Royal Household is negotiating with the Prime Minister, David Cameron, and the Chancellor, George Osborne, for an increase in the Civil List and the grant-in-aids to cover the Royal Family's costs.
But the Palace insisted yesterday that the money to pay for the £50,000 party and gifts would have come from the Queen's private income. Plans for the ambassadors' Christmas party and the Royal Family's private celebration at Sandringham are unaffected.