One of Prince Charles's closest aides has resigned, as an internal report criticised the running of the royal household.
Michael Fawcett, Prince Charles's personal assistant, has resigned
The report, by the prince's private secretary Sir Michael Peat, considered a range of issues and alleged misconduct at St James's Palace, including sales of royal gifts by servants.
The inquiry said the prince's aide, Michael Fawcett, did bend the rules by accepting numerous gifts, such as a £2,500 watch and £3,000 club membership, without declaring them.
But it cleared him of any financial impropriety, saying he could not be severely criticised because the rules were not enforced and he made no secret of such gifts.
Although Mr Fawcett has resigned, he will still work freelance for the palace, carrying out some event management and being given "some financial help".
Click for more details on Charles's palace staff
The report also strongly criticised the palace's handling of a male rape allegation.
Claims by former royal valet George Smith that he was raped by another male servant in 1989 were handled too dismissively, it said.
Sir Michael criticised the palace's actions, although the allegation "was universally disbelieved not just in the Prince of Wales's office but also by Hounslow Police".
The review does not make comfortable reading in some parts, but I accept full responsibility and
all the recommendations
Prince Charles is reported to have forced the valet out after the allegation, saying: "George must go".
And Fiona Shackleton, Charles's lawyer, is reported to have said: "I had instructions from the boss [Prince Charles] to make the whole business go away".
Mr Smith later dropped his claims.
The Prince of Wales, who is out of the country on a short tour of Bulgaria, said: "The review does not make comfortable reading in some parts, but I accept full responsibility and
all the recommendations.
PEAT REPORT - KEY POINTS
Prince Charles's valet Michael Fawcett cleared of any financial impropriety but he did accept and sell gifts
"No improper" conduct over the trial of butler Paul Burrell
But Prince William knew Mr Burrell had Diana's possessions 18 months before trial collapsed
Palace's handling of male rape allegations criticised
Palace strongly criticised for lack of procedures concerning official gifts
"I am determined that the administrative procedures in my household
should be to the highest standards and I have asked Michael Peat to ensure that
this is the case."
The inquiry was ordered following the collapse of the trial of Princess Diana's former butler, Paul Burrell.
Mr Burrell was cleared of theft when the jury learned he had told the Queen five years previously he had taken some of the princess's property for "safekeeping".
The report found neither the Queen nor Prince Charles's households had displayed "improper conduct" over the trial.
But it said Prince William had known 18 months before the trial's collapse that Mr Burrell was safeguarding Diana's possessions.
That was because Mr Burrell had written to him after a police visit, saying: "Items which have been taken from me, many of which were given to me for safekeeping, should be returned to you."
Paul Burrell's solicitor, Andrew Shaw, said in a statement: "The report makes it clear that following his arrest and before his trial Mr Burrell had offered to discuss his case on an unrestricted basis with the Royal family.
"Sadly... that did not happen. The report also makes it clear that the approach taken by Mr Burrell was consistent throughout"
The report was most critical of the prince's household
concerning the sale of official gifts.
"I am not going to make any excuses - things have not been well handled in
this office," Sir Michael told reporters.
He found no instances of staff corruptly receiving gifts, stealing royal gifts, or selling gifts without authorisation from Prince Charles.
But procedures for the receipt and disposal of gifts had been "deficient", he said - and any rules in place had not been enforced.
Both Prince Charles's and the Queen's household had since agreed that future official gifts would only be given away if perishable or worth less than £50, the report said.
Otherwise they would be used or consumed by a member of the Royal Family, displayed in royal properties,
made part of the Royal Collection held in trust for the nation, placed on
loan, given to a registered charity or sold for charity.
All gifts received by staff - from Royal Family members or elsewhere - should be declared so tax could be collected and the household could have a record, he said.
All official gifts to royals be properly recorded
Only to be given away if they are worth less than £50, or perishable
Otherwise they must be used, displayed, made part of the Royal Collection, put on loan, given to charity or sold for charity
Ahead of the report, several Labour MPs and lawyers had said as it was written by a royal insider it would be perceived as a whitewash.
Sir Michael said: "I do not think the report is in any shape or form a whitewash - it is detailed, open and honest."