The Prince, his £8m, and a home he no longer loves

He still proudly surveys its glorious organic gardens, but for Prince Charles, the dream that was Highgrove has turned sour. First the marriage that was meant to flourish there came crashing to a bitter end. Now his financing of the estate is under the microscope.

He still proudly surveys its glorious organic gardens, but for Prince Charles, the dream that was Highgrove has turned sour. First the marriage that was meant to flourish there came crashing to a bitter end. Now his financing of the estate is under the microscope.

Little wonder the Prince's affections have shifted, towards Birkhall, the residence on the edge of Balmoral left to him by the Queen Mother. It is where he honeymooned with the Duchess of Cornwall. It is there he likes to escape the metropolitan media glare.

And yet the shadow of Highgrove stalks him. Today's revelation that Prince Charles has paid himself around £8m in rent since the Duchy of Cornwall bought the estate is just the latest in a series of "creative accounting" procedures raising eyebrows.

The handsome house, with its neoclassical façade looking out over rolling countryside, was bought for the Prince by the Duchy in 1980 for £865,000. At the time, royal- watchers speculated that the purchase suggested wedding plans. And indeed, he and Diana, Princess of Wales, spent much of their early married life there together.

Nevertheless, Camilla has her own close associations with the Gloucestershire estate, as revealed in the first review of his financial activities last year. It showed that she stabled her horses at his home and he sent a retired Highgrove gardener to help tend the grounds of her nearby property, Ray Mill House.

On Tuesday, Prince Charles will publish his second annual review. The glossy brochure will record in detail the many charitable and other official duties that the heir to the throne has carried out in the past 12 months, alongside the balance sheet. Introduced by Sir Michael Peat, his private secretary, it is intended to convey an impression that a new air of openness is sweeping though the corridors of Clarence House.

Highgrove is also used as a venue for seminars and other meetings of leading figures in the various causes the Prince espouses. A new function room, the Orchard Room, was recently added to allow larger get-togethers. Its official use allows the Prince of Wales to offset part of the costs of Highgrove against his tax bill.

The ambiguous status of the house may help to explain why Duchy of Cornwall officials were less than clear about who paid for it when quizzed by the Public Accounts Committee (PAC) earlier this year. Bertie Ross, secretary and keeper of the records of the Duchy of Cornwall, said: "There is a proper agreement between the Duchy of Cornwall and the Prince of Wales for which he pays a full market rent which is, in this case, assessed by two separate valuers because of its sensitivity."

It emerged, however, from information slipped into the House of Commons library earlier this month that the "rent" of £336,000 a year is in effect paid into the Prince's own coffers.

Although Clarence House is insisting this weekend that Mr Ross gave "correct" information, it seems likely that he will be recalled by MPs. Alan Williams, a senior PAC member, is determined to recall the Duchy officials to grill them over the arrangement.

"They are really going to have to come back to the Public Accounts Committee because they were not economical with the truth, they were miserly with it," said Mr Williams. "There can be no doubt about the impression they meant to give when they said he pays a 'full market rent' and we now know that it is very different from the truth."

Mr Williams said the officials had mounted a "charade" in drawing attention to the use of two valuers, and if it was found that they had knowingly misled the committee, they could be held accountable for a breach of parliamentary privilege.

The PAC has become increasingly interested in what one member termed the Prince's "creative accounting". Although he volunteered to pay income tax in 1993, the Duchy of Cornwall was quietly allowed to remain exempt from capital gains tax. The exemption has helped the value of the Duchy to quadruple since the Prince's divorce. Calculation of the Prince's expenditure on official duties is also being questioned.

Bit by bit, royal finances are coming under the same sort of scrutiny as is given to government spending. The new powers of scrutiny enabled The Independent on Sunday to disclose last month how little the Duke of York and Earl of Wessex paid for their mansions in Windsor Great Park.

PALACES FIT FOR A PRINCE

Clarence House

What is it?

The family pad. A stuccoed mansion spread across four floors, Clarence House passed to the Prince of Wales upon the death of the Queen Mother. Millions of pounds were spent transforming it into the official residence for Charles, Camilla and Princes William and Harry.

Location, location, location?

Bang in the middle of regal London. Situated on the Mall, it is ideal for engagements with foreign dignitaries and visiting royalty of all kinds.

Through the keyhole you'll find

Select works from the royal art collection. The Prince renovated the place before moving in. This is where he does his work: planning visits, bemoaning the state of modern architecture and deciding it's a good idea to travel by helicopter to Highgrove.

Highgrove

What is it?

The country pile. The Duchy of Cornwall bought Highgrove House on behalf of the Prince of Wales in 1980. It is a rectangular three-storey building with nine bedrooms, four reception rooms, eight bathrooms and a nursery wing. The house became the first home for Charles, Diana and their sons.

Location, location, location?

In the heart of Gloucestershire, overlooking some of England's finest rolling countryside near Tetbury and Cirencester.

Through the keyhole you'll find

The heir to the throne chatting to the begonias. It was at Highgrove that the Prince honed his love of all things horticultural. He is said to have spent £500,000 transforming the 37-acre estate into a showcase for organic farming and gardening. He recently added a function suite on the grounds.

Birkhall

What is it?

The Highland hideaway. Birkhall is another home previously occupied by the Queen Mother. This is where Charles and Camilla came for their honeymoon. It is said to be the Prince's favourite place on earth and provided a bolt-hole for him when he fled the rigours of Gordonstoun school.

Location, location, location?

Perched on edge of the Balmoral estate, Birkhall's great attraction is its solitude. The salmon-rich River Muick flows through the garden.

Through the keyhole you'll find

Tartan. On the walls and on the floors. The Queen Mother gave the place a distinctly Caledonian feel. Servants remove the muddy green wellies and fishing gear as the royals relax in front of a log fire after a day in the great outdoors. Charles and Camilla are also thought to enjoy some painting.