Burrell: Earl Spencer was a 'hypocrite' for his speech

The undignified row surrounding the Paul Burrell story gained momentum this morning. While The Sun's front page proclaimed "Queen Blasts Barmy Butler", Mr Burrell launched a scathing attack on Diana, Princess of Wales's family in the Daily Mirror.

In it he criticised her brother, Earl Spencer, calling him a "hypocrite" for his "stomach turning" speech at the funeral and claimed Frances Shand Kydd made "shocking" telephone calls to her daughter late at night. In a pointed attack on Earl Spencer, Mr Burrell, 44, added: "And I, for one, would never have paraded her life before a museum and charged £10.50 a time."

As part of his first interview with the paper yesterday ­ in a deal said to be worth £300,000 ­ he claimed the Queen had warned him about "powers at work" in the country. This morning's Sun retorted with assertions that the monarch was "livid" about the "ramblings of a madman". The paper has said it intends to contest an interim High Court injunction prevented it publishing extracts from statements Mr Burrell gave to police.

It also emerged last night the tabloid bidding war for the story had included a £2m offer from one newspaper group if he reneged on a deal he had agreed with a rival publication.

A showbusiness agent acting for the former confidant of the Princess of Wales, said the bid to persuade Mr Burrell to switch his story from the Daily Mirror also came with a bribe for him to persuade his client to swap sides.

David Warwick, the Cheshire-based agent who helped to negotiate a media deal after Mr Burrell's acquittal last Friday on theft charges, said the offer from a national newspaper came during the final negotiations with the Mirror earlier this week.

Mr Warwick said: "I can confirm that a publication did offer money for us to jump ship while the negotiations were in place. I can also confirm that a national newspaper offered me a bung to supply him [Mr Burrell] to them. It was an extraordinary thing to do and I feel totally offended that they thought I would stoop so low."

The deal with the Mirror, which printed 10 pages yesterday focusing on Mr Burrell's account of the conversation four years ago with the Queen that led to him being cleared at the Old Bailey last Friday, was sealed at a comparatively low price by Fleet Street standards.

Packages for the serialisation rights to books, such as the recent autobiographies of Ulrika Jonsson and Edwina Currie, now regularly reach six figures. The story of Mr Burrell, with his intimate knowledge of the Royal Family, would have been worth considerably more.

Rival publications such as the Daily Mail, which had been the favourite to clinch a deal because of the links between its royal reporter, Richard Kay and the butler, is understood to have offered £600,000. The Sun is believed to have offered £1m in a package with its fellow News International publication, News of the World. None of the titles was commenting on Mr Warwick's claims last night.

Perhaps unsurprisingly, Mr Burrell, from Farndon, Cheshire, became the target of a backlash from publications that failed. Amid claims that he was exploiting his acquittal for money, he was portrayed as an "outcast" and a "grovelling flunky". Meanwhile, the Attorney General, Lord Goldsmith, the most senior law officer, said the Crown Prosecution Service "will be considering carefully the lessons" from the collapse of the trial.