Inside the financially perplexing world of Prince Andrew

The A4 letter came in a hardback envelope complete with a first class stamp. Asking whether the recipient still wanted to remain on the database of the Duke and Duchess of York, last month’s mail out – ahead of the expensive Christmas card season – must have cost hundreds of pounds.

Quite why Prince Andrew and his ex-wife Sarah Ferguson could not have sent an email instead is anyone’s guess. Yet the episode spoke volumes about how the couple, who still live together at Royal Lodge, Windsor, despite divorcing in 1996, have continued to behave like frontline royals, even though those days are long behind them.

Yet with talk, in recent days, of the Duke having to “force through” the sale of their £18m ski chalet to pay legal bills – which could get even heftier amid speculation of a $5 million (£3.7 million settlement) with his accuser Virginia Roberts Giuffre – just how are Andrew and “Fergie” still affording their jet-set lifestyle?

The Duchess has just returned from the luxury chalet in the exclusive resort of Verbier, where she saw in the New Year with their daughters Beatrice and Eugenie and their families. Both princesses gave birth to their first child last year: Beatrice has a four-month-old daughter, Sienna, with husband Edoardo Mapelli Mozzi, while Eugenie and Jack Brooksbank are parents to 11-month-old son, August.

The sale comes as the Duke’s hot shot US lawyer Andrew Brettler appeared in court in New York on Monday in a bid to have Mrs Giuffre’s case thrown out. She claims she was forced to have sex with the 61-year-old royal on three occasions when she was 17 on the say-so of his friend, the late billionaire paedophile Jeffrey Epstein. The Duke vehemently denies the allegations.

Judge Kaplan is yet to announce his decision on whether the civil case should go to trial – but either way the options are costly, with Andrew facing either a lengthy legal battle to clear his name or the possibility of a seven-figure pay-off. Mr Brettler is rumoured to be charging around $2,000 (£1,476) an hour, while the Duke has also hired Melissa Lerner, a Princeton and Columbia graduate. Both work for Lavley Singer, a renowned Los Angeles-based law firm reputed for its ability to make celebrities’ legal problems “go away” – and commanding the fees to do so. Along with his UK-based legal team, led by criminal defence solicitor Gary Bloxsome, the Duke’s legal costs have been soaring.

Until now, it is believed that the Queen has been paying them for her second, and some say favourite, son. But it is no secret the Duke has also had to find outside sources of funding.

Before Christmas, it emerged that he had taken a £1.5 million loan from Tory donor David Rowland. The multi-millionaire businessman, 76, reportedly wired the money to a London bank account held by the Duke – a long-term friend of his – in December 2017, the amount having been increased 11 days earlier by £250,000 to cover the Prince’s “working capital and living expenses”.

Despite concerns the loan was “not in line with the bank’s risk appetite”, staff at Banque Havilland, which is owned by Mr Rowland and his family, apparently approved the extension, having noted that it opened up “further business potential with the Royal Family”.

It followed reports that, during the course of their lengthy relationship, the Duke acted as an unofficial door opener for Guernsey-based Mr Rowland, worth an estimated £600 million, in return for the use of his £33 million private jet.

Norman Baker, a former government minister and the author of a book about the Royal’s finances, called for Parliament to investigate with “some urgency”, arguing that there are “significant questions” to answer about Prince Andrew’s business dealings.

There are also, arguably, significant questions to answer about Andrew’s spending in light of recent events – not least after the royal, who owns a watch collection including a £150,000 Patek Philippe, last year splashed out on a £220,000 Bentley to add to his two Range Rovers.

Her Majesty, 95, reportedly agreed to pay for Andrew’s defence at the beginning of last year, shortly after his disastrous Newsnight interview, in which he failed to show any empathy for Epstein’s victims or regret over their friendship. The funds have been sourced from her annual income from her private Duchy of Lancaster estate, which recently increased by £1.5 million to more than £23 million. This is on top of the £250,000 annual stipend she gives Andrew to top up his £20,000-a-year Royal Navy pension.

Yet with the allegations having left his reputation in tatters, whatever the outcome of the proceedings, there remain serious concerns about how the “grand old Duke of York” is going to get back on an even fiscal keel.

As one source put it: “The Duke is currently totally dependent on the Queen but that surely cannot go on forever. The trouble is the Yorks’ outgoings are still huge. Andrew is still paying for Beatrice and Eugenie’s private bodyguards.”

Then there’s Fergie, who was reportedly on the brink of bankruptcy in 2010 following a string of failed business deals and after being caught in a News of the World sting trying to sell access to Andrew to a reporter posing as a sheik, for £500,000.

“It doesn’t matter how much money she has, it just seems to slip through her fingers. They are not in a great place right now,” added the insider.

Mr Rowland is not the first multi-millionaire to have lent money over the years. In May 2011, the Duchess apologised for a “gigantic error in judgment” in accepting a £15,000 loan from Epstein to pay off her debts. Two months later, the Duke stepped down as the UK’s trade envoy after it emerged he had stayed at the disgraced financial adviser’s Manhattan mansion after he had been imprisoned for soliciting a minor for prostitution. Andrew’s judgement had already been called into question for holding meetings with Libyan leader Col Muammar Gaddafi’s son, Saif, and for entertaining the son-in-law of Tunisia’s ousted president Zine El Abidine Ben Ali at Buckingham Palace. Eyebrows were also raised after he took Mr Rowland’s businessman’s son, Jonathan, on trade envoy missions to China and Saudi Arabia.

And then there was the intriguing matter of the Duke managing to sell Sunninghill Park, the Yorks’ marital home, for £3m more than its £12m asking price in 2007 to Timor Kulibayev, the son-in-law of the President of Kazakhstan.

The Yorks do not pay any rent on Royal Lodge, the freehold of which is owned by the Crown Estate, after spending £7.5 million renovating the Grade II listed 30-room property in 2003. They are also understood to get favourable leasing deals on their Range Rovers.

Nevertheless, cash flow has been a problem since the Duke stepped down as a working royal “for the foreseeable future” in November 2019, following that Newsnight appearance. The damaging tete a tete with the BBC’s Emily Maitlis also cost him Pitch@Palace, the Dragons Den-style mentoring network that had helped to rehabilitate his image, as well as facilitating a continuation of the jet-set lifestyle that earned him the nickname Air Miles Andy.

In 2014, the Yorks surprised royal watchers by jointly purchasing a £18 million ski chalet in Verbier as a “family investment”. Some questioned how the couple could afford to buy the seven-bedroom property – complete with indoor swimming pool, sauna and bar – in the exclusive Swiss resort.

That purchase also courted controversy when it was revealed the couple were being sued by the former owner, French socialite Isabelle de Rouvre, for a £6.7m unpaid debt. In September, it was reported that the lawsuit had been dropped and the chalet was being sold for £17.3 million – a loss of £700,000. But three months on and they are still clearly using it as a holiday destination.

What the Yorks had hoped would act as a future “nest egg” for children and grandchildren, now appears to have become a casualty of the Duke’s dramatically changed circumstances.

Some might say they are on a slippery slope.