A British monarch is to pay income tax for the first time since the 1930s.
The Prime Minister, John Major, told the House of Commons the Queen had informed him earlier this year that she wished to make changes to her tax arrangements.
She will also take responsibility for the working expenses of most of her family under changes Mr Major said should be implemented in April 1993.
The decision has been broadly welcomed by Westminster and is fully supported by the Prince of Wales, who already pays some tax on his income.
Buckingham Palace has denied the announcement is related to growing public concern about the rising cost of the monarchy.
Questions have been raised about who will foot the bill for repairing Windsor Castle, which was severely damaged in a fire last week.
But a palace spokesman said the Queen and Prince Charles had made their decision before the July summer recess of Parliament.
Under the new arrangement the only royals who will be paid for by the public will be the Queen, the Duke of Edinburgh and the Queen Mother.
Chairman of the influential Tory backbench 1922 Committee Sir Marcus Fox said public pressure should now come off the monarchy.
And constitutional expert Lord St John of Fawsley said the decision proved the Queen was in tune with public opinion.
“She’s a wise woman – she’s known nine prime ministers and she’s been on the throne for 40 years,” he said.
But historian David Starkey told the BBC even bigger changes were needed.
“This is not the solution, this is simply addressing the symptom – the solution is to find something positive for the monarchy to do,” he said.
Courtesy BBC News
Since 2001 the monarchy have published their annual accounts in an attempt to make royal finances more transparent.
The Queen’s duties as head of state continue to be funded with public money.
In the financial year 2003-2004 this amounted to £36.8m.
Her personal fortune is estimated to be about £275m.