Queen called Princess Diana 'frightful' after bombshell decision which embarrassed royals

The Queen labelled Princess Diana's decision to hit out at the Palace in her bombshell Panorama interview as "frightful" at a private lunch weeks after it aired, it has been claimed.

Diana spoke about her husband Prince Charles's affair, her thoughts on his lover Camilla and her own adultery in the sit down chat with Martin Bashir.

Watched by 22.8 million viewers, she also described the prince’s camp as the “enemy” and said the monarchy was in desperate need of modernisation - causing huge embarrassment for the Royal Family.

Diana didn't speak to anyone at the Palace before recording the chat, which was widely criticised at the time, but knew she would have to face the consequences.

The family were reportedly furious, with the intimate details causing a wealth of embarrassment for the entire Firm, and the Queen was said to be particularly hurt.

Richard Eyre, who sat on the BBC's Board of Directors at the time, met the Queen for lunch shortly after the interview was broadcast.

Speaking on Channel 5's new documentary Diana: The Interview That Shocked the World, he said: "I had lunch with the Queen not long after and she said to me, unprompted, 'how are things at the BBC?'.

"And I said, 'well fine'.

"She said 'frightful thing to do, frightful thing that my daughter-in-law did'."

The interview was reportedly the final straw for the Queen, and after hearing Diana's words she wrote to Charles and the Princess advising them to divorce.

Her former butler, Paul Burrell, told the programme: "That was the price she paid for the Panorama interview."

Diana has specifically said she didn't want a divorce, despite already being separated from Charles.

When the letter arrived, Diana was reportedly furious that she was being forced to agree to a divorce she didn’t want, reportedly telling her butler Paul Burrell: “That’s rich! They get to decide whether I divorce!”

The Queen wrote: “I have consulted with the Archbishop of Canterbury and with the prime minister and, of course, with Charles, and we have decided that the best course for you is divorce."

But just days later, Buckingham Palace communicated the ‘decision’ to the world, saying in a statement that “after considering the present situation the Queen… gave them their view, supported by the Duke of Edinburgh, that an early divorce is desirable.”

The Queen's letter finally put an end to the “fairytale” marriage of the Prince and Princess of Wales which had enchanted millions around the world, beginning with a lavish wedding in St Paul’s Cathedral on July 29, 1981.

Diana and Charles finally divorced eight months later, with a ‘decree nisi’ on August 28 1996.

Diana was reportedly awarded a Sh2.4 billion (£17 million) lump sum and Sh49.4 million (£350,000) a year to run her private office, and was allowed to keep her apartments at Kensington Palace, while Diana and Charles agreed to share custody of their sons.

But despite Diana’s insistence, she was stripped of her title of Her Royal Highness, and instead became known as Diana, Princess of Wales.

While the Queen was said to be happy for her to keep the title, bearing in mind that she was the mother of a future king, Charles was reportedly adamant that she lose it.

Losing the HRH meant it was no longer necessary for friends or staff to bow or curtsy in Diana’s presence. More humiliating, though, was that she herself would now have to curtsy to her husband, her two sons, and a whole host of minor royals.