Robert Eringer, a United States private detective who also claims to be a former FBI agent, alleged in an interview this week that he ran a service called the "Monaco Intelligence Service", reporting directly to the Prince, from 2002 to 2007.

 

He claims he met Albert, who is also the President of Monaco's Olympic Committee and competed in five Olympics in the bobsleigh, via billionaire mutual friends in 1991 and that the Prince informally recruited him to brief him on key businessmen and potential investors in Monaco in an effort to "clean up" corruption in the principality.

 

People he investigated included a top businessman, a senior civil servant and a property developer, Eringer told French news magazine Paris-Match.

 

The 55-year-old also said he "infiltrated" local media on behalf of the Prince, who - he alleged "loved to know who was informing the papers" - until Albert broke off their relations in 2007, two years after acceding to the throne.

 

Eringer has filed suit in California accusing the 51-year-old Prince - who as Head of State has diplomatic immunity - of wrongful contract termination.

 

The Monaco Royal Palace responded today with a statement denying the assertions in bulk, and saying that - judicial proceedings are under way in the US against Eringer.

 

A statement from the Palace said: "The Palace wishes to express its indignation regarding the numerous untrue and defamatory claims made against H.R.M. Prince Albert II of Monaco that sully his image and the renown of the Monaco principality."

 

The Palace did not deny the Prince knew Eringer, with whom he has been photographed arm-in-arm in the past.

 

Prince Albert's lawyer Thierry Lacoste said that he was in the process of launching a lawsuit against Eringer in Los Angeles, on several counts including defamation.

 

Lacoste said: "Mr Eringer's accusations are baseless.

 

"There is not a single element of proof.

 

"This is just a load of hot air."