?37m of taxpayers' money in reserve

The royal finances are so awash with taxpayers' money that Buckingham Palace has built up a record "reserve" of £37m on the civil list fund. The annual civil list accounts show that this reserve has grown by £2m in the past year despite the fall in stock market values.

The £37m reserve has been built up since 1990 when the annual £7.9m a year civil list payment was fixed to include a 7.8% inflation allowance - and has never been reduced.

Civil list spending at £8.4m in 2001 unusually exceeded the £7.9m Treasury allowance and so £533,000 was taken from the reserve to finance the difference.

Nevertheless, the accounts show that the value of the reserve grew from £35.6m in 2000 to £37.1m last year. The Royal Household Investment Committee, which accounts reveal has been in existence since 1990 to invest the surplus on the civil list, managed to avoid the sharp fall in stock market values by investing in money market deposits. The interest earned boosted the civil list reserve by £2m.

The accounts show that Buckingham Palace expects civil list spending again to exceed the £7.9m a year Treasury allowance in 2002 - but it expects the interest from the money market deposits to once again cover the difference. That would leavethe royal family with £37m of taxpayers' money in the bank.

Buckingham Palace confirmed yesterday that the aim is to keep the equivalent of one year's spending in the reserve - about £37m - and that none of the money can be clawed back by the Treasury until the Queen dies and a new civil list is agreed.