Queen pays £1m to let Kents stay in palace

The Queen has agreed to pay almost £1m rent to allow Prince and Princess Michael of Kent to stay in their apartment at Kensington Palace until the end of the decade, Buckingham Palace announced yesterday.

In a further concession to growing concern over the use of grace-and-favour residences, Princess Margaret's former apartment at Kensington Palace is to be opened to the public as an education centre and exhibition for the royal ceremonial dress collection.

The Queen's intervention comes after an outcry by the public and MPs at the Kents' continued payment of a peppercorn rent for their sumptuous apartment, which is worth an estimated £125,000 in rent at market rates.

Prince Michael, who is the Queen's cousin, has been paying just £69 a week for the five-bedroom, five-reception room apartment where he has lived since his marriage to Baroness Marie-Christine von Reibnitz in 1978. Buckingham Palace confirmed yesterday the Queen will pay market rent rates for the prime London property from next year from her private savings. She will pay £60,000 in 2003-04 and £120,000 a year afterwards for up to seven years. The money will be paid to a government fund used to maintain occupied royal palaces.

"It has been agreed it is appropriate that rent should be paid on the apartment occupied by Prince and Princess Michael of Kent. The Queen has agreed to pay this rent from her own funds for up to seven years," Buckingham Palace said yesterday. "This is in recognition of the work in support of the monarchy and various charities that Prince and Princess Michael of Kent have undertaken at their own expense, and they have never received any public funding for their work."

Earlier this month, The Independent reported Prince and Princess Michael were paying a nominal rent despite calls for change this summer from the House of Commons Public Accounts Committee and opposition MPs.

MPs welcomed the Queen's intervention but called for all the subsidy since 1978 to be paid back. Norman Baker, the Liberal Democrat MP for Lewes, said: "It's welcome that this abuse of taxpayers' money is ending but the subsidies that have been in place should now be repaid as part of this deal. The state is not there to pay for pampered poodles' accommodation."

The Queen also indicated she would contribute to Prince and Princess Michael of Kent's income in retirement, even if they move out of the flat after the end of the decade.

The Prince and Princess issued a statement expressing "gratitude to the Queen for her generous support". A spokesman added: "The times have changed and they acknowledge a need for change. But they are delighted that they will be able to continue their work for the diverse causes and charities which they cherish and, at the same time, have received an endorsement and encouragement to continue undertaking their public engagements."

The former home of Princess Margaret, who died in February, will be taken over by the Historic Royal Palaces, a self-funding charitable trust.

As well as administering the Kensington Palace State Apartments, already open to the public, the trust manages the Tower of London, Hampton Court Palace, the Banqueting House in London's Whitehall, and Kew Palace. All costs will be paid by the trust, which receives no public funding.