The BBC's Jennie Bond: "It may well be the couple will want a grand affair at Westminster Abbey"

Buckingham Palace has refused to confirm or deny the report published in the Sun newspaper but a close friend confirmed that they are engaged.

An official announcement is to be made on Wednesday morning.

The Sun says the marriage will take place this summer at Westminster Abbey.

The BBC's Royal Correspondent, Nicholas Witchell, says that the absence of a Palace denial gives the story some credence.

Queen 'delighted'

Quoting a Royal source, the paper said the Queen was "utterly delighted" and that an official announcement would come from Buckingham Palace on Wednesday.

Sophie Rhys-Jones: PR executive

Prince Edward, 34, is said to have proposed over the Christmas holidays after spending time alone with Miss Rhys-Jones, 33. The couple have been together for more than five years.

Ever since the Queen's youngest son and Miss Rhys-Jones, a public relations executive, began their relationship there have been several false rumours of an imminent engagement.

The BBC's Janette Clucas: "Miss Rhys-Jones is already an accepted part of the Royal Family"

News of their relationship was revealed in December 1993 by Andrew Morton, unofficial biographer of the late Diana Princess of Wales. He wrongly predicted they would get engaged on the prince's 30th birthday - March 1994.

The Sun reports that Prince Edward hesitated to take the plunge because of he was "painfully aware" of his brothers' failed marriages - Prince Charles's with Princess Diana and Prince Andrew's with Sarah Ferguson.

Prince Edward has deliberately kept their courtship low profile.

Miss Rhys-Jones has quietly become an accepted part of the Royal Family and is even reported to have her own rooms at Buckingham Palace.

If they were to marry Prince Edward and Miss Rhys-Jones would make a thoroughly modern Royal couple - both with their own high-flying careers. The Prince has his own TV production company, Ardent Productions and last year presented a series called Crown and Country about the history of Britain.

His girlfriend runs her own PR firm and publishes a magazine for the Duke of Edinburgh Awards scheme.