Queen $15m short each year
Buckingham Palace is in money talks with Britain's coalition government, after it was revealed that the Queen is having to top-up her allowance with an emergency account that is about to run out.
For the past year courtiers have been preparing for what they hoped would be a multi-million-pound increase in the civil list, the money that the Queen receives from Parliament to perform her duties.
It is understood that in the past few weeks the Queen's treasurer, Sir Alan Reid, has briefed government officials that her expenditure is running at about £7 million (NZ$15 million) more than the annual allowance. This shortfall is being met by an emergency reserve that is expected to run out in 2012.
The civil list, £7.9 million (NZ$16.8) a year, has been frozen for 20 years.
Courtiers say that, in the long term, the Queen needs an increase in annual funding that at least takes into account inflation over the past 20 years - 80 percent during that time.
The Queen, however, is sensitive to public opinion and ministers fear a public relations disaster if the civil list is increased by such a large amount in the wake of the economic crisis.
The government is expected to make an announcement on the civil list on June 23, the day after the Chancellor of the Exchequer, George Osborne, delivers his emergency budget, in which he is likely to reveal more details of public spending cuts and possibly tax increases.
Some would see a rise in the civil list of more than £6 million (NZ$12.8m)a year as insensitive, especially as it would come so soon after the government announced £6 billion cuts in public spending.
The annual civil list figure is negotiated every decade and the last increase was agreed in 1990. Since then, the Queen has had a revenue freeze. A number of royal palaces are in a state of disrepair and need millions of pounds spent on them.
Meanwhile, the Duchess of York's repeated claims that she has been financially cut adrift by the Queen and the Prince Andrew since her divorce have been contradicted by royal officials.
It has been revealed the duchess and her daughters have received about £3 million (NZ$6.4m) from the royal family in the past 14 years.
Sydney Morning Herald