The Family of Princess Diana is understood to have decided against legal action to ban the publication of Andrew Morton's biography Diana: Her True Story In Her Own Words. The reasoning is believed to be that a court case would have involved open discussion of her mental condition in the months before the end of her marriage.
It also emerged yesterday that reports of the last words spoken by the princess, which were endorsed by claims by the owner of Harrods, Mr Mohamed al-Fayed, could not be verified because Princess Diana did not regain consciousness after the Paris car crash, according to the hospital staff who treated her.
The publisher of Mr Morton's biography insisted yesterday that Irish-born Dr James Colthurst was the reluctant "intermediary" between the princess and Mr Morton but that he had never been paid for his role. Meanwhile the Spencer family was understood to have rejected the idea of legal action against the author.
The debate surrounding the ownership of tape recordings, in which the princess discussed the problems of fulfilling her role within the British royal family, could have been made public in a lengthy court room battle.
However, mindful of the harmful effect on the princess's sons, Prince William and Prince Harry, a Spencer family friend said yesterday: "It would have involved open discussion, which would have been dangerous and tasteless, on whether Diana knew what she was doing."
Meanwhile, a spokesman for the Pitie Salpetriere Hospital in Paris where the princess was taken after the car crash in which her friend Dodi Fayed and their driver, Henri Paul, were killed, dismissed reports that she had spoken any last words.
Since the accident at the end of August, Mr Mohamed al-Fayed has claimed that Princess Diana spoke to a hospital worker, apparently a nurse, before she died and that he was able to convey her comments to "the appropriate person" at a private meeting.
However, the head of communications at the hospital, Mr Thierry Meresse, contradicted Mr al-Fayed's version of Diana's final hours yesterday, insisting: "It is a gross error to say that the princess uttered last words. I can tell you she never regained consciousness from the minute she entered the hospital.
"I can only assume that a nurse's name was given to make the story seem more likely, but no nurse of that name works at the Pitie Salpetriere, " he said. "There is a nurse with the same surname but she works in a completely different department and would not have been anywhere near the princess."
A spokesman for Mr al-Fayed said last night that he would "never say another word about this matter". Mr Michael Cole insisted that he could not name the hospital worker in Paris and that Mr al-Fayed "obviously believed what he was told".