Royals should still serve in the armed forces despite the decision not to deploy Prince Harry to Iraq, Defence Secretary Des Browne has said.
The prince said he wanted to be with his soldiers in Iraq
Harry's career has been called into question after the Army decided the posting was too dangerous.
But Mr Browne said: "I don't accept for a moment that the long tradition of the Royal Family serving in the military is in any sense an anachronism."
The prince is said to be disappointed, but committed to his army future.
Speaking at a lunch in Westminster, Mr Browne said the situation in Iraq was different in character to the 1982 Falklands conflict, in which Prince Andrew served with the Royal Navy.
Mr Browne added: "Clearly, in the Falklands War, a member of the Royal Family was deployed into circumstances of danger and it was entirely appropriate to do that.
"But a judgment has to be made about the circumstances of the conflict and not all conflicts are the same."
Mr Browne said he could "personally understand" concerns that the prince's life seemed to be valued above those of other service personnel, but "the deployment of Prince Harry would increase the risk to others disproportionately".
The announcement, which represents a U-turn on an earlier decision, was made amid reports militant groups in Iraq planned to kill or kidnap the prince.
General Sir Richard Dannatt, the head of the Army, had previously said he had decided not to send the prince because of "specific threats" against him.
Asked what these threats were, Mr Browne replied: "I can't tell you anything about that and I don't think you would expect me to.
"There were threats that were in the public domain and there was intelligence and we don't discuss intelligence in public."
Last month the Ministry of Defence had said the prince would be heading to Iraq as an armoured reconnaissance officer in the Blues and Royals regiment.
But on Wednesday, the general said he had reached his decision following a visit to the region at the end of last week.
The U-turn has focused attention on Harry's future and the role of the royals in the modern military services.
Major Charles Heyman, editor of Armed Forces UK, said he thought the prince would almost certainly leave the Army.
While he could be found a "non-job" to keep him "out of trouble", he would be left without credibility by the decision not to deploy him to Iraq, Major Heyman said.
Following the Army's decision, some families of those killed in Iraq have questioned why their relatives should be sent to the front line when the third in line to the throne is not.
Reg Keys - whose son Thomas was killed while on active service in Basra in 2003 - said he found the decision distasteful.
"It would appear that Harry's life is more valuable than my son or the other nearly 150 service personnel who've given their lives," Mr Keys added.