King Charles is furious with Prince Andrew over ‘Chinese spy’ crisis that has made entire Royal Family ‘look bad’, insiders reveal

The king is said to be furious that Prince Andrew has plunged the monarchy into a major scandal – with his relationship with an alleged Chinese spy tarnishing the reputation of the entire royal family.

However, a source said that despite his frustration with the Duke of York, Charles has accepted that he cannot “divorce or dismiss” his younger brother because “there will always be a blood tie.”

It came as this newspaper learned that, astonishingly, the Palace cannot rule out the Duke using money from Chinese donors to support his stay at the 30-room Royal Lodge in Windsor Park.

Officials have concluded that they have no authority or legal right to investigate Andrew’s financial affairs and must simply rely on his word that his income comes from legitimate sources.

“The Palace has behaved as best it can in a difficult relationship,” the source said last night.

“Every sanction that can be imposed has been, but you cannot divorce or fire your brother because he is your brother. There will always be a blood bond and all families often have difficult relatives to deal with. Of course people understand that it looks bad for the whole family, but that is because of one individual.’

The latest scandal broke on Thursday when it emerged that a “close confidant” of the Duke of York was an alleged Chinese spy who was banned from entering Britain after an MI5 investigation.

In what appears to be an extraordinary breach of national security, the alleged agent, who can only be named as H6, was so close to Andrew that he visited Buckingham Palace twice, entering St James’s Palace and Windsor Castle.

Prince Andrew with the alleged Chinese spy in 2019. Officials have concluded they have no authority or legal right to investigate Andrew’s financial affairs and could not rule out that he had used Chinese donors to support his stay at Royal Lodge in Windsor.

He was even authorized to act on Andrew’s behalf to seek investors in China.

MI5 discovered that the 50-year-old businessman was a member of the Chinese Communist Party and worked for the shadowy United Front Work Department, which collects intelligence.

When police stopped him at the UK border in 2021, it was discovered that he had a briefing document which appeared to describe Andrew as someone who was in a ‘desperate situation and would grab onto anything’.

The Mail on Sunday can reveal that the alleged spy previously attended a meeting of the powerful Chinese People’s Political Consultative Conference (CPPCC) in Beijing. As a sign of his importance to the Chinese Communist Party, he was pictured in the front row of the meeting in the vast Great Hall of the People.

Royal sources are concerned that the growing controversy threatens to overshadow the good work of the King and Queen Camilla, as well as the Prince and Princess of Wales. It also comes less than two weeks before the King’s Christmas message.

Earlier this year, the king stopped paying his brother’s £3 million-a-year security bill at the Royal Lodge and urged him to move to more modest accommodation.

But in November it emerged that the duke had been allowed to stay at the property after convincing palace authorities that he had secured enough money to cover his living expenses.

The Keeper of the Privy Purse, Sir Michael Stevens, reportedly approved that the funding came from legitimate sources. However, last week’s revelations raise new questions about where exactly Andrew found the money to finance his stay at the Windsor mansion.

The MoS understands that because he has a leasehold agreement with the Crown Estate and not with the Royal Household, he has the same rights and responsibilities as any private tenant.

Indeed, the Palace has concluded that it has no power to conduct ‘due diligence’ investigations into the Duke’s private income, any more than they could demand the right to investigate a private individual’s financial records.

Earlier this year the king stopped paying his brother’s £3million-a-year security bill at Royal Lodge (pictured) and urged him to move to more modest accommodation. But in November it emerged that the duke was allowed to stay after raising enough money to support himself

Officials are said to have repeatedly asked the Duke whether his income comes from legitimate sources – and he has insisted it does.

But last night former minister and royal finance expert Norman Baker said: ‘It is extraordinary that the palace does not know where the money comes from.

“They need to figure this out urgently and tell us.”

Prince Andrew stepped down from his royal duties in 2019 amid the scandal over his ties to billionaire pedophile Jeffrey Epstein.