The prince, who is on the island for a six-week deployment as an RAF search-and-rescue pilot, also has an armed close protection unit including soldiers from the Royal Military Police on standby.
The Special Forces troops arrived on the Falklands over a period of several weeks as Argentina escalated its rhetoric over sovereignty of the disputed territory with renewed calls for them to be handed over.
Tensions have been increasing as the 30th anniversary approaches. Argentine troops invaded on April 2, 1982. They were defeated in a 74-day war which claimed 255 British and 649 Argentine lives.
Intelligence analysts are understood to be concerned that Argentine fanatics could mount an attack in the run-up to the anniversary.
The resources of Special Forces are stretched because of operations including those in Afghanistan, East Africa, the Middle East and the security preparations for the London Olympics, but the SAS and SBS are expected to remain on the Falklands until well after the prince has left.
The Special Forces' primary role is not to guard William, who last week carried out his first rescue mission since arriving on the Falklands. That duty has been assigned to the close protection unit.
But they will be on standby to 'engage and neutralise' any 'real and credible' threat and have weapons including high-velocity Minimi semi-automatic assault rifles, gas-loading pistols and stun grenades.
The team, which has built up after arriving in the Falklands on regular RAF flights with troops and supplies via the Ascension Islands, have spent the past weeks scouting the islands.
A senior British security source said: 'They may spot a ship or people with a dinghy and they would be straight there to check it out.
'If they are not happy with the situation they have permission to shoot to kill. If people pose a threat it's up to those guys to deal with it. No chances are being taken over the safety of the prince or the islands.'
Major Charles Heyman, a defence analyst and editor of the British Army Guide, said: 'You would not leave it in the hands of the regular Army to guard Prince William. He is the heir to the throne so you would expect considerable security to keep him safe. If there was not a Special Forces unit with their capabilities helping out, there would be an outcry.'
Diplomatic friction between the UK and Argentina, which has repeatedly claimed sovereignty over the islands it calls Las Malvinas, have intensified since 2010 when British firms began oil exploration in nearby waters.
Buenos Aires has called William's posting and the deployment of HMS Dauntless, one of the Royal Navy's most powerful warships, 'provocative'.
Earlier this month Argentina officially complained to the United Nations about the UK's 'militarisation' of the Falklands - a claim described as 'absurd' by Britain.
Argentina is now likely to be unhappy that SAS and SBS forces are on the islands.
The Special Forces played a pivotal role in recapturing the British territory in 1982.
On April 25, the SAS, SBS and Royal Marine commandos retook South Georgia without a shot being fired. At least 170 Argentine troops surrendered.
On May 14 the SAS carried out a lightning raid on Pebble Island where the Argentine navy had taken over a grass airstrip for its Pucara ground attack aircraft and T-34 Mentor planes. The mission destroyed the aircraft, dealing a severe blow to the enemy's capabilities.
However, the regiment also suffered its heaviest loss of life during the conflict. Twenty members were killed when their Sea King helicopter lost power and plunged into the freezing South Atlantic after a freak collision with an albatross on May 19.
- DAILY MAIL
