US diplomats who fear their London embassy is vulnerable to terrorist attacks have reportedly failed to persuade the Royal Family to let them move to Kensington Palace.
Kensington Palace is closed for commercial use for the time being
According to the Sunday Telegraph, US Embassy officials made an informal approach to the Royal Household, arguing that the secluded location of Kensington Palace would be safer than their current offices in Mayfair.
Buckingham Palace is said to have seriously considered the request, but dismissed the idea because the residence was home to several Royal "sitting tenants".
But the embassy strenuously denied the claims on Sunday, saying it had never spoken to, or had any contact with, anyone connected to Kensington Palace.
The newspaper also reports that Royal officials have been researching possible future commercial uses for the building, but could not consider any proposals while family members still lived there.
The Dukes and Duchesses of Gloucester and Kent, Princess Alice Duchess of Gloucester, and Prince and Princess Michael are expected to move out within the next 10 years.
Kensington Palace - the former home of Diana, Princess of Wales - is set further back from the street and is harder to reach than the embassy's home of 220 years in Grosvenor Square.
Security is already tight around the palace, not least because the Israeli and Russian embassies are located in an adjacent gated street.
Embassy officials told the Sunday Telegraph it had looked into relocating to the palace, among other possibilities.
Despite heightened security, the embassy is "vulnerable" to attack
A spokesman for Buckingham Palace said it was possible an informal approach had been made to the Royal Household by the embassy, but added he could not confirm it.
"We have received no formal approach from the American embassy to request the use of Kensington Palace," he said.
The idea of approaching the Royal Household is said to have come from Westminster councillor Glenys Roberts, who is campaigning to get the embassy moved on the grounds that it is a potential "magnet" for terrorists.
She told the Telegraph it would be easier if the Americans moved away from the area, to one which was already fully secure.
Local people have also been lobbying against the embassy's increasing fortification, which includes wire and concrete barriers, road closures and checkpoints manned by security staff armed with sub-machineguns.
Their protest group, called Ground Zero, has opposed plans to make the extra security measures permanent.