Prince Michael of Kent is understood to be "disappointed" with his long-term friend the Marquess of Reading after a business meeting attended by the pair saw him accused of using his royal status to sell access to Vladimir Putin's regime.
The Queen's cousin told undercover reporters posing as South Korean gold investors that he could be hired for £10,000 (NZ$19,000) a day to make "confidential" representations to the regime.
He said he would give their fictitious company his royal endorsement in a recorded speech for a $200,000 fee and was happy to use his Kensington Palace home as a backdrop.
Buckingham Palace yesterday sought to distance itself from the furore, insisting that as the prince was not a working member of the royal family, it could not speak on his behalf.
It remained unclear whether the palace will investigate the allegations or whether they will impact on the 100 or so public duties and engagements the Prince conducts annually on behalf of the Queen. Her Majesty is not yet thought to have spoken to her cousin about the revelations, made by Channel 4's Dispatches and The Sunday Times.
