PRINCESS DIANA yesterday took the unusual step of speaking out to deny a report that divorce negotiations are under way.
A Sunday newspaper claimed the Princess had demanded Clarence House, the residence of Britain's Queen Mother, as her London home in a detailed multi million pound settlement.
A spokeswoman for Princess Diana said there was "no truth" in the story.
"No negotiations have taken place. There has been no discussion about Clarence House and no reliance whatsoever should be placed on the story," she said.
The report in the Mail on Sunday claimed Princess Diana's lawyers had made the Clarence House demand as a tactical device to force her estranged husband, Prince Charles, to agree to spend up to £6 million on an alternative London home and a further £1m on a country retreat. It quoted a "royal source" as saying Princess Diana, who currently lives in Kensington Palace, had driven a hard bargain in negotiations over a divorce settlement.
It also claimed Princess Diana was insisting that, should she remarry and have more children, Queen Elizabeth must award them a hereditary title.
Further, the paper's unnamed correspondent claimed the Princess had rejected offers of the title Duchess of Cornwall or even Her Former Royal Highness.
Although Princess Diana replied to Queen Elizabeth's letter, sent before Christmas, to confirm that she had received it, she has not yet responded to her mother in law's request for the couple to seek a speedy divorce.
Prince Charles and Princess Diana separated in 1992 and newspapers have reported in recent weeks that Queen Elizabeth had ordered them to divorce.
Princess Diana said in a controversial television interview last autumn that she would not seek a divorce but would leave the matter up to Prince Charles. Both Prince Charles and Princess Diana have admitted committing adultery.
The couple, who married in 1981, have two sons Prince William (13), and Prince Harry (11).
Meanwhile, the Duchess of York enjoyed a family day out at the cinema today to help raise funds for her charity, Children In Crisis. She took her daughters, Princess Beatrice and Princess Eugenie, to the royal premiere of the film A Little Princess.
The duchess and the princesses arrived at the Warner West End cinema in London's Leicester Square in a silver Mercedes. Other stars who attended included Paula Yates and Michael Hutchence and Rik Mayall.