Nicholas Hellen, Media Editor

THE Countess of Wessex has ignited a potentially explosive confrontation with the government by making public the royal family's private attitudes on a wide range of politically sensitive issues.

She was recorded describing the prime minister as "President Blair", referred to William Hague, leader of the opposition, as "sounding like a puppet" and called Gordon Brown's most recent budget a "load of pap", accusing the chancellor of hiking taxes.

Her wildly ill-considered remarks were recorded by an undercover journalist posing as a potential client of her public relations firm R-JH. The full transcripts were published last night by the News of the World.

Relations between Downing Street and the palace were under extreme pressure as the full impact of her remarks sank in. Although some remarks had leaked out a week earlier, the detail was astonishing.

Even before publication of the transcripts, Stephen Byers, the trade and industry secretary, had questioned her judgment in being hoodwinked, and Kim Howells, the consumer affairs minister, described the royal family as "a bit bonkers".

The countess's decision to ride out the backlash, and to continue with the firm, appeared untenable as her business partner was exposed as a drug user, willing to arrange gay parties for clients.

Murray Harkin, who co-founded the R-JH agency with the countess four years ago, was recorded admitting taking cocaine and also casting doubt on the sexuality of the Earl of Wessex, saying: "There's no smoke without fire."

Harkin also described how the countess could be used to promote products without appearing to do so by being photographed at launch parties or on press trips. "We do this all the time, Sophie and I," he said.

The countess told the "sheikh": "If anybody ever gets some kind of additional profile or benefit from being involved with us because of my situation, that's an unspoken benefit."

But the palace will suffer much greater damage from the countess's statements on public life, and the suspicion that her views may reflect those of the royal family.

She dismissed Tony Blair as "ignorant of the countryside" and accused him of disregarding its woes at the height of the foot and mouth crisis.

"Because the popular vote is within the city, he's going to go with that all the time," she said.

Blair is accused of insincerity in her account of the way he paid tribute to Diana, Princess of Wales, on first hearing of her death. "To give you an example, when Diana died, Tony Blair came out and he gave this completely impassioned, supposedly off-the-cuff speech. I know it wasn't off-the-cuff at all because I know who wrote it.

"He almost did the Bill Clinton. We call him President Blair over here anyway because he thinks he is. That's his style."

The prime minister's wife, Cherie, is dismissed with even greater contempt. "His wife is even worse, she hates the countryside. She hates it."

Her devotion to her legal career is characterised as a lack of confidence in her husband's ability to win the next election. "Maybe she didn't think her husband's government was going to last long, so she'd have to go back to work anyway."

The countess adds: "I think the majority is too great. Labour will lose a lot of seats."

Gordon Brown, the chancellor, is written off for his supposed lack of substance. She calls his pre-election budget a "nothing budget. It's all for the election, that's all it is. It's a load of pap".

She appears to endorse Conservative criticism of Labour as incapable of shaking off its addiction to high taxation. "They failed to say . . . that the figure of increase in everybody's taxes is frightening. Since the Labour party came to power, the man in the street is paying something like an additional 40% in tax."

In a phrase that could almost be adopted by the opposition in the forthcoming general election campaign she added: "They've snuck in so much through the back door."

But the so-called "Sophie tapes" are also likely to damage relations between the palace and the Tories. She says Hague's intelligence is undermined by "this awful kind of way he talks". She adds: "He sounds like a puppet."

She also accuses John Major of whipping up royal crises to protect his own position. In an aside that many will regard as reflecting the views of the palace, the countess, who married into the royal family in July 1999, two years after Major left Downing Street, said: "He used the royal family terribly badly to
cover up a lot of things they were doing. The leaks that were coming from Downing Street were frightening."

The countess also touches the subject of the relationship between the Prince of Wales and Camilla Parker Bowles. "It's not really fair any more to describe her as Prince Charles's mistress," she says. "They could marry. You can have a ceremony, it doesn't need to be in a registry office, you can actually do them anywhere.

"But, because he is going to be head of the church when he actually succeeds to the throne there is a difficulty there . . . I don't think a lot of people would want Camilla to be Queen."

She is asked at one point what plans she and Edward have for the titles that would be conferred on their children. She says: "It is up to us. The only reason we wouldn't want them to be royal highnesses, princes and princesses is because of media attention."

The countess contrasts the "normal life" of Zara and Peter Phillips, children of the Princess Royal, who have no title, with the likely fate of Princesses Beatrice and Eugenie, daughters of the Duke and Duchess of York.

She explains how she resisted pressure from the media to step onto the "empty pedestal left by Diana". She says she opted for the life of a working royal instead of carrying out public engagements full time: "I don't think I could have coped with that level of expectation."

The prime minister felt it necessary to distance himself from criticism of the royal family by his ministers yesterday. A No 10 spokesman reaffirmed Blair's support for the royal family after Kim Howells's "bonkers" jibe.

This weekend Sophie's husband Edward intervened in the row over allegations that he and his wife have exploited their royal connections for business.

In an attempt to put an end to damaging claims that his role as a working royal is a sham, he revealed that his television company is at last paying its own way after seven years of losses.

Ardent Productions, which has racked up £1.9m of losses since its formation in 1993, will announce this week that it has made its first profits. After its annual meeting on Wednesday it will declare a five-figure sum after tax for the past financial year.

The earl told The Sunday Times: "It is of immense personal satisfaction to me and a great credit to the company. Of course it is positive news.

The earl appeared exasperated by the intensity of scrutiny over the past week, saying: "The whole thing is so ridic . . ." He cut himself short and added: "It is not worth saying anything at all."

He dismissed as wrong a series of allegations which have fuelled the row by appearing to prove that he had mixed business with his royal duties. It was "totally wrong" to suggest that he had used a royal tour to the Far East to line up a documentary series on the private gardens of the Sultan of Brunei and the King of Malaysia. He also said he had "no plans" for Ardent to become involved in filming the Queen's golden jubilee celebrations next year.

This weekend senior royal aides accused the government of deliberately "fanning the flames" of the Sophie tapes affair. A senior Buckingham Palace official said he believed the government was intent on keeping the story on the public agenda.

The Sunday Times, April 8 2001.