Monday September 8 4:53 PM EDT New Report Describes Royal Dispute Over Diana By David Ljunggren LONDON (Reuter) - Britain's beleaguered royal family was plunged into fresh controversy on Monday by a television report that said Queen Elizabeth had at first insisted Princess Diana be given a private funeral. Channel Four news said the queen only relented after Prince Charles put up ferocious resistance and told her private secretary to "impale himself on his own flagstaff." The report could seriously damage the royal family, which was widely criticised for being too bound up by protocol and not mirroring the huge national outpouring of public grief after Diana was killed in a Paris car crash last Sunday. The source for the story was a senior official close to court circles, the programme said. The queen -- who resented the damage done to the royal family's prestige by Diana during the protracted split with Charles -- seemed to have averted a crisis on Friday by making an unprecedented live broadcast praising the princess. But Channel Four said she had initially insisted the royal family have nothing to do with Diana's body at all. "It was made very clear to Prince Charles that Princess Diana's body was on no account to be brought to any of the royal palaces... The queen's desire was for her to be taken to a private mortuary and then to a private funeral," the program said. "Charles had a blazing row with Sir Robert Fellowes in which Sir Robert was told to 'impale himself on his own flagstaff'." Fellowes is married to the former Lady Jane Spencer, Diana's elder sister. It was only when the prince was flying to Paris to pick up his ex-wife's body that he contacted Prime Minister Tony Blair and the two men agreed Diana should be laid out in St James's Palace and given a public funeral in Westminster Abbey. Buckingham Palace had earlier on Monday sought to silence calls that it should posthumously restore Princess Diana's title of Royal Highness. A palace spokesman said officials had spoken to Diana's brother Earl Spencer on Saturday, hours after he used her Westminster Abbey funeral service to deliver a thinly veiled attack on the royal family. The Channel Four program said communication between the royal family and the Spencers had broken down after the earl learned of the queen's initial wishes and only mediation by Blair's office helped patch up the row. Spencer, who also blamed the media for making Diana the "most hunted person of the modern age," told the funeral service that the princess had proved "she needed no royal title to continue to generate her particular brand of magic." Diana lost the title of Her Royal Highness on her divorce a year ago in what many Britons felt was a vindictive move by Buckingham Palace. Palace officials said at the time she had voluntarily relinquished the mode of address. Spencer himself thanked people worldwide for their support and then paid a private visit to Diana's grave on an island in the family's central England estate. Thousands of Britons flocked like pilgrims again on Monday to Diana's Kensington Palace home, adding more flowers, notes and toys to the sea of bouquets outside. The Union flag, which had flown at half-mast over Buckingham Palace in a break with centuries of royal protocol, was taken down at dawn on Monday as official mourning ended. Queen Elizabeth's decision to allow the flag to fly at half-mast over the palace followed days of criticism that the royal family had remained aloof and indifferent while the nation wept. British newspapers pledged to leave Diana's young sons in peace. The Sun tabloid said it had "no intention of carrying photographs which invade the privacy of Princes William and Harry." Aides of heir-to-the-throne Prince Charles, whose stiff formality contrasted with the warmth and spontaneity of his ex-wife Diana both during and after their marriage, said he was well aware of the need to modernize the monarchy. "No one could be more aware than Prince Charles that this is an institution that has got to adapt and change," said Tom Shebbeare, chief executive of the Prince's Trust charities for young people. In France Monday, a police source confirmed that Princess Diana was not wearing a seatbelt when the car in which she was riding crashed at high speed in a Paris road tunnel early on August 31. "The only person inside the car who wore a seatbelt was the bodyguard who survived," a senior police officer told Reuters in the first official confirmation that she had failed to take a safety step which might have saved her life. There had been widespread media speculation that she was not wearing a belt and the officer's statement was believed to be the first time police had commented on the issue. They had refused so far to address the question. The officer quashed reports that a valuable necklace, carried in a case by Diana's companion Dodi Al Fayed at the time of his death in the crash, had gone missing. The necklace, which press reports said was worth $416,000, was not found during an initial perfunctory inspection of the Mercedes but was discovered during a more detailed search hours later, the officer said. The police also denied reports that a preliminary police report had blamed driver Henri Paul, rather than the paparazzi who were chasing his car, for the crash. "No such conclusion has been reached one way or another," the senior police officer told Reuters. He said that even the speed at which the car was driving had not yet been ascertained "though we would narrow it down to between 150 and 180 kph (90 and 110 mph)." Paul was killed in the crash. Police later said doctors had found three times the level of alcohol legally permitted for driving in his bloodstream. His burial, set for last Saturday, was postponed until an unspecified date following a third series of blood tests. Officials said on Monday the body was still at the main Paris mortuary. The British embassy released a statement on behalf of the family of bodyguard Trevor Rees-Jones, the sole survivor of the crash. It said he had undergone a 10-hour operation last Thursday for his serious facial injuries and it would be some time before he was able to speak to investigators. Press reports said Rees-Jones had been saved by an air bag and because he had been wearing a seat belt. Some legal experts have said the probe into Diana's death was likely to take months, perhaps years, before it decided how far paparazzi, alcohol or speed were to blame. Nine photographers and a motorcyclist for a photographic agency are targets of a manslaughter probe over the crash. The daily Le Figaro reported that investigators increasingly viewed the paparazzi as witnesses to the accident rather than parties to it. But lawyers representing some of the paparazzi said any decision by investigating magistrate Herve Stephan to clear them or consider them merely as witnesses were at least several months away.