Thousands of pounds have been spent on tying royal servants into tighter confidentiality agreements, Buckingham Palace has revealed.
New contracts have been drawn up for palace staff to avoid leaks
An annual review of the Queen's Civil List expenditure showed legal bills soared by £125,000 in 2003 to cover one-off costs for new staff contracts.
These aim to stop royal staff leaking private details to the press.
The accounts showed the yearly cost of funding the Queen rose by a penny per person to 61p - £36.8m in total.
Buckingham Palace said the increase was a 1% reduction in real terms.
More state visits, overseas tours and ceremonial costs accounted for much of the 1.7% increase in Head of State expenditure for the financial year 2003-4.
Legal bills for drawing up new royal staff contracts are expected to be a one-off expense.
The move is part of a three-year review of measures to stop leaks about the private lives of the royal family.
The wording in contracts for staff from every level up to the Lord Chamberlain has been strengthened to avoid legal loopholes.
Staff now sign a personal confidentiality agreement with the Queen - and if they breach it, any money they make must be given to charity.
It follows revelations from undercover Daily Mirror reporter Ryan Parry, who got a job as a palace footman, and former royal butler Paul Burrell.
The Property Grant-in-Aid budget - which pays for running royal premises, including maintenance, utilities and telephones - will be frozen at £15m until 2005-6.
The Queen is believed to have changed her energy supplier as part of a cost-cutting operation.
Alan Reid, the Keeper of the Privy Purse, argued funding the Queen was not a great expense for UK residents.
He said: "This year's expenditure per person, per annum, amounts to 61p or less than two pints of milk."
Ceremonial costs contributed to a rise in the Queen's spending
The BBC's royal correspondent Nicholas Witchell said critics might question the continuing high cost of the royal train.
The accounts show it was used 18 times over the 12-month period, adding up to £43,000 per use.
The accounts also showed the Duke of York used Ministry of Defence aircraft to fly him to St Andrews in Scotland from London for two golfing trips at a cost of more than £7,300.
Another £2,939 was spent on sending him to a lunch in Oxford.
The Duke of York may also face questions over a £90,000 trip to the Caribbean as an ambassador for UK trade.
Buckingham Palace said the below-inflation rise was the result of an ongoing effort to cut costs.
Mr Reid said: "We want full transparency and clarity. We believe that we publish more information than any other organisation in the country, including public companies, and we believe that this helps that."