Reports indicate that Andrew Mountbatten Windsor will forfeit a significant portion of the half-million-pound compensation he was set to receive for relinquishing his lease on Royal Lodge.

The embattled royal, who is the king’s brother, was originally promised £558,000 from the Crown Estate following his decision to vacate the sprawling 30-room residence. This decision came in the wake of controversy surrounding his association with convicted sex offender Jeffrey Epstein.

However, insiders have noted that the Windsor Great Park property requires substantial renovations, and the expenses for these repairs are expected to significantly reduce his compensation package.

Despite this setback, Andrew will receive a one-time payment in the six-figure range to assist with relocating, along with an annual allowance. This stipend, funded privately by the King, is intended to ensure that Andrew does not face financial difficulties in his life outside the royal circle.

Sources suggest that this yearly allowance will far exceed his £20,000 Navy pension.

The King plans to utilize private funds to support this financial arrangement, opting not to draw from his Duchy of Lancaster revenue.

The King receives an annual private income of more than £27million from the duchy, an ancient portfolio of land, property and assets which is held in trust for the sovereign.

Andrew, the late Queen’s second son, is to move to a smaller home on the King’s private Sandringham estate in Norfolk in the new year, completing his internal exile, after agreeing to quit Royal Lodge, where he had paid a peppercorn rent for more than 20 years.

Charles dramatically stripped his younger brother of his prince and Duke of York titles on Thursday, cementing his banishment from public life.

Andrew had tainted the reputation of the royal family over his association with Epstein and, for many years, has been dogged by allegations he sexually abused Virginia Giuffre after she was trafficked by the financier.

He has strenuously denied the allegations.

Andrew, the former Duke of York, is seen driving out of Royal Lodge in Windsor

Photos show peeling paint on one of the outside walls at Royal Lodge 

The King had long tried to encourage Andrew, who shared Royal Lodge with his ex-wife, Sarah Ferguson, to move out, but he had signed a watertight, 75-year lease on the property in 2003.

His leasehold agreement revealed he paid £1 million for the lease and that since then he paid ‘one peppercorn’ of rent ‘if demanded’ per year.

He was also required to pay a further £7.5 million for refurbishments completed in 2005, and the agreement contained a clause that stated the Crown Estate would have to pay him about £558,000 if he gave up the lease.

Under the terms of the lease, Andrew had to ensure the exterior of the mansion was repainted with two coats of paint every five years and the outside stone and cement work was cleaned and repointed.

He also had to repaint the interior – also with two coats of paint – every seven years.

The prince was also required to ‘paper polish decorate’ and treat the inside of the seven-bedroom home respectfully.

Photos show paint peeling off the exterior walls of the Grade-II listed property, which was designed by the architect John Nash around 1815. 

A source told the Telegraph that money would be taken away from Andrew’s compensation to cover the repairs.

It comes amid reports Sarah Ferguson is hunkering down in Royal Lodge following Andrew’s disgrace and may quit the UK. 

The former Duchess, who will now have to find a home of her own away from Andrew, is said to be ‘more on edge’ than her ex-husband. 

A source told the Daily Mail: ‘Sarah is going around blaming herself. She keeps repeating ‘what if I hadn’t done this, or hadn’t done that’.’

Meanwhile, another source said that Fergie is now considering leaving the country.

They said: ‘She’s always rather lived on the hoof and aside from her children and grandchildren, there’s not a lot to keep her here.

‘Put it this way, the invitations have dried up overnight.’

The grand mansion has been home to Andrew and his ex-wife, Sarah Ferguson

For years, Sarah has been a staunch ally of Andrew, supporting him in the aftermath of his disastrous Newsnight interview in 2019.

The couple, who officially divorced in 1996, have even continued to live together for most of the three decades since.

But Sarah has now said she will find her own place and ‘will move on with her life’ – as Andrew begins his new chapter as a private citizen at the Sandringham estate in Norfolk.

Nevertheless, it is expected to take weeks for Andrew to finally leave Royal Lodge – with the move not due to take place until the new year.

A source said: ‘The Amazon deliveries that go up to Royal lodge are unbelievable. There are rooms full of boxes that haven’t even been opened.

‘It will take weeks, if not months to shift all their s*** out.’

Another insider explained that while Sarah and Andrew once brought strength to one another, the opposite now appears to be the case.

‘There are many who have almost admired her dogged loyalty to her ex-husband and family,’ they said.

‘She has always found a way to bounce back from the many public scandals she has faced over the years, normally with a well-paid public mea culpa and a promise to change her ways.

‘[But] That’s unlikely to happen this time. It’s not just a question of her finances now, but her personal dealings with a serial sexual predator – and her willingness to lie about them.