Elizabeth I, Virgin Pirate

She could show the hard-pressed Windsors a thing or two about money

From now on, the Royals will have to watch how they mix business with business. After a review by a committee headed by the Lord Chamberlain, Lord Luce, Bucking- ham Palace issued new guidelines on how members of the Royal Family who undertake official engagements are to conduct private business careers. They are told to be "particularly vigilant" to avoid being accused of exploiting their status.

The guidelines follow indiscretions earlier this year by Sophie, Countess of Wessex, as head of the R-JH public-relations firm, and criticism of Prince Edward for exploiting his connections to boost his television company, Ardent.

Both incidents, however, were low on the scale of royal naughtiness compared with the record of that supreme entrepreneur, Elizabeth I, who indulged not so much in PR as in piracy. Unlike her grandfather, the cautious Henry VII, the Virgin Queen was always hard-up. Furthermore, unlike her father, Henry VIII, who doubled his income at a stroke by dissolving the monasteries, she could not simply help herself when the coffers ran dry. Her money-making had to be more subtle, devious even. Hence the presence at court in 1577 of a celebrated seadog known on the Continent as El Draque –the dragon.

Francis Drake was foremost among that extraordinary breed of Elizabethan Englishmen, the proselytising Protestant pirate who doubled as an entrepreneur-cum-explorer. In 1577 he was planning to sail west through the Straits of Magellan and into the heart of Catholic Spain's prodigiously rich New World empire. It was a risky but potentially highly profitable undertaking.

Lured by the scent of gold, leading court figures were involved. It was not long before the Queen got wind of the scheme and demanded "to be made pryve to the trewth of the viage". Duly informed, she asked discreetly to be added to the list of backers. But she swore that if news of the voyage reached the King of Spain, she would have the culprit's head on the block.

Drake sailed on 15 November 1577 with 164 men in five ships. With this tiny armada, he had been charged by Elizabeth to take "some revenge" on the "Kynge of Spayne" for the "dyvers iniuries" done to her. He had also been told that the best form this revenge could take would be financial.

The voyage moved into the black at the end of 1578, when Drake plundered gold and jewellery from Valparaiso. Profits became stratospheric a few months later with the seizure of the lumbering Cacafuego, a treasure-chest stuffed with a vast amount of "specie" – gold and silver coins – and other precious items. The ship's hold bulged with one-third of the New World's stupendous output of silver.

Remarkably, the most successful campaign of semi-official piracy ever cost not a single life.

Having claimed California – naming it New Albion – for the Crown, Drake set out for home in July 1579. Two of his ships had been abandoned, one had disappeared and a fourth had gone home already. Sailing in the Pelican, renamed the Golden Hind, he crossed the Pacific, topped up his loot with spices in the East Indies, and reached Plymouth on 26 September 1580.

Investors in Drake's circumnavigation received a phenomenal £47 for each £1 invested. Elizabeth is reported to have made at least £160,000, with California and assorted jewels thrown in. The money, equivalent to six months' normal income, was used to clear her foreign debt, with a substantial sum left for further investment.

Philip of Spain raged in vain against the unprincipled Royal involvement in a public-private partnership. His protests were about 400 years ahead of their time.