Charles' former top aide Michael Fawcett could make a spectacular return to working for the King for a third time after police sensationally dropped a probe into cash for honours allegations.

Insiders suggested last night that His Majesty had not totally cut contact with Mr Fawcett, with the King 'not unaware of Michael's circumstance'.

And they were asking whether he could yet bounce 'Lazarus-like' back from the scandal, having twice been forced to resign while working for the King over several decades of royal service.

One source told the Mail today: 'Michael Fawcett is still in touch with the King, from what people hear. He won't ever truly be gone.'

However, it is understood there has been no direct contact between the two men since the allegations first emerged 15 months ago.

King Charles' former top aide Michael Fawcett could make a sensational return to work for His Majesty for the third time after police dropped a probe into cash for honours allegations. Pictured: The then-Prince of Wales and Mr Fawcett in 2019

Palace insiders claim Mr Fawcett is still in touch with the King. Pictured: Mr Fawcett outside his home in south west London in 2021

Mr Fawcett has also very much lost the support of Queen Camilla, who has been keen to cut ties with him completely.

The case focused on a letter first published in The Mail on Sunday in which Mr Fawcett, 60, offered to help a wealthy Saudi donor obtain a knighthood and British citizenship in exchange for his ongoing generosity.

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Mahfouz Marei Mubarak bin Mahfouz had given generously to the charity and was presented with a CBE in 2016 by the King, then the Prince of Wales, in a private ceremony at Buckingham Palace. Emails appeared to show a direct link between the donations received and the honours.

The Met launched its investigation in February last year. Two men, one in his 50s and one in his 40s, were questioned under caution in September. Today the force said it had concluded that it will take no further action following 'early investigative advice' from the Crown Prosecution Service.

Mr Fawcett resigned as chief executive of the King's charity The Prince's Foundation in November 2021, while his events company, Premiere Mode, which organised private events and entertaining for the then Prince of Wales, was dropped in the wake of the scandal.

Questions were also being asked last night by some sources about how extensive the Met Police investigation into the scandal was.

One said today: 'I'd love to know precisely what the Metropolitan Police have been investigating for the past 18 months. As far as many people know, no-one in the royal household was ever interviewed about this.'

Mr Fawcett, a former senior valet to Charles, has twice previously been forced to resign over scandals, including accusations of bullying and selling on unwanted royal gifts. But each time the then Prince of Wales took him back and even promoted him.

He was a singularly unpopular figure in the royal household, sources have revealed. Many staff were fearful of the power he knowingly wielded, aware he had the then heir to the throne's ear.

But the prince relied on him 'completely' and was said to have famously remarked he 'could manage without just about anyone, except for Michael'.

The Palace has been asked if Mr Fawcett could once again work the King in a professional or private capacity but has refused to comment.

Prince Charles pictured shooting with Michael Fawcett at Sandringham in Norfolk in 1990

The King's former top aide pictured at Dumfries House in Cunnock, Ayrshire, in Scotland in 2011

It said only that it had 'noted the decision of the Metropolitan Police Service' and said anything else was a matter for the Royal Foundation.

Royal commentators feel it is unlikely Mr Fawcett could work for the King professionally, such as within the royal households, as that would be taxpayer funded.

However he and his party planning company Premier Mode have also worked for Charles privately.

Following his resignation as chief executive of The Prince's Foundation a Clarence House spokesman said it was ending this arrangement but there was no comment today as to whether this could be re-instated.

The decision by the Met was criticised by Norman Baker, the former Liberal Democrat minister who had written to Scotland Yard asking them to investigate the Prince's Foundation under the Honours (Prevention of Abuses) Act.

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He told The Guardian: 'This is an incredibly open and shut case with the evidence provided in writing. It is astonishing how this matter is not being taken forward. We need an explanation from the Crown Prosecution Service and the Met Police as to why no action is being taken.

'But the suspicion must be that no action is being taken because of the nature of the potential offender, rather than a proper assessment of the potential crime.'

In that statement, it said its Special Enquiry Team (SET) 'obtained court production orders, spoke with a number of witnesses and reviewed in excess of 200 documents' as part of the investigation.

It added: 'Should any new information or evidence come to light that requires further assessment, this will be carried out by the Met's SET. Nobody has been arrested or charged during the course of this investigation.'

The Met's statement was issued shortly before the King received an official welcome to Balmoral Castle today at the start of his three-week summer stay there with Queen Camilla.

Charles, wearing a kilt, appeared in good spirits during a small ceremony outside the Castle gates as he inspected a Guard of Honour formed of the Balaklava Company, 5th Battalion The Royal Regiment of Scotland. The Pipes and Drums of 4 SCOTS also performed at the ceremony, and The Royal Regiment of Scotland's Mascot, Shetland Pony Corporal Cruachan IV, was present.