The authorities in Austria are assessing the economic impact of Prince Charles' decision to cancel his planned trip to a British trade fair in Vienna in May.

The Foreign Office advised him not to go because of the far-right Freedom Party's inclusion in the country's coalition government.

Austria's 14 EU partners have frozen political contacts after Joerg Haider's anti-immigration party joined the country's power-sharing government.

Mr Haider has previously praised aspects of Nazism, and the rise to power of his party has raised international concerns.

The Prince's decision was taken after the Foreign Office cancelled the planned British trade fair in the Austrian capital.

A Buckingham Palace spokeswoman said: "In the light of the current circumstances, the Prince of Wales's visit to Austria has been postponed.

"A decision about a future visit will be considered in due course.

"The Prince of Wales, like other senior members of the Royal family, travels overseas on the advice of the government."

The snub is the UK's most direct response yet to the crisis.

A Foreign Office spokesman said: "As soon as the new Austrian government was appointed, we submitted advice to the Palace and we have been in constant touch with them."

The spokesman would not elaborate on what changes to the Austrian administration would have to be introduced to make it possible for the Prince to visit the country.

The mayor of Vienna was informed of the cancellations by British ambassador Sir Anthony Figgis.

A spokesman for the British Embassy in Vienna said: "The political climate isn't particularly conducive to getting new commercial business."

Fashion show

The Britain Now show was due to take place in Vienna and Feldkirch from 17 May to 28 May, featuring UK exporters and showcasing home-grown culture.

A fashion show highlighting British designers was among the scheduled events.

Products from Prince Charles' organic farms have previously been launched on the European market at the shows.

But the Prince's move was criticised by Conservative MP Nicholas Winterton, chairman of the All-Party Group on Austria.

"I am saddened that our Royal Family and the proposed visit by Prince Charles have been dragged into this matter on the advice of the Foreign Office," he said.

'Impertinent'

"The Foreign Office has in the past been known to be wrong and I suspect that it is wrong on this occasion."

Mr Winterton said it was "impertinent" of the British government to deem the democratically-elected government of Austria unacceptable and to decide that a visit by Charles would be impossible.

Liberal Democrat foreign affairs spokesman Menzies Campbell welcomed the decision.

"It would have been unthinkable for Prince Charles to have fulfilled this engagement," he said.

"The Austrian government is on probation. Normal service cannot be resumed until it has proved its good faith."