"The Queen has been forced to give up the ultimate right to manage the Palace's financial affairs in a secret deal signed by Palace aides and the Government, The Independent has learnt.

"A "financial memorandum" formalising the relationship between the sovereign and ministers also sets out tough terms on how the Queen can spend the £38.2 m handed over by Parliament each year to pay for her staff and occupied palaces.

"The document, disclosed under the Freedom of Information Act, grants ministers the constitutional right to take over the direct management of the Queen's public wealth in the event of a disagreement over how the subsidy is awarded or spent."

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