The Duke and Duchess of Sussex struck a deal with Buckingham Palace to pay no further rent on Frogmore Cottage after refunding the £2.4 million taxpayers paid for its refurbishment, The Mail on Sunday can reveal.

It had been reported that the Sussexes would pay a 'commercial rate' for the five-bedroom mansion on the Windsor estate. But Palace officials last night confirmed that the lump-sum payment wiped out the couple's rental obligations as the increased value of the property following the work was taken as 'rent in lieu'.

It's estimated the property would cost between £150,000 and £230,000 a year to rent, which means that the Sussexes may have saved up to £690,000. They will not renew their lease when it ends later this month.

A Palace spokesperson said: 'The Duke and Duchess of Sussex made a contribution of £2.4 million to the Sovereign Grant which covered the refurbishment of Frogmore Cottage. They have fulfilled their financial obligations in relation to the property.

'In line with usual practice for the Sovereign Grant report, the accounting treatment was scrutinised and signed off by the National Audit Office and the Treasury. As with any such agreement between landlord and tenant, further details regarding the Sussexes' tenancy arrangements would be a private matter.'