During his glory days, Peter Palumbo owned ten magnificent properties, including Bagnor Manor in Berkshire, where he gave sanctuary to his close friend Princess Diana after she separated from King Charles.

Now, however, times are apparently so hard for the property developer and art collector that, I can reveal, he has put his West London home on the market for £16.5million.

The house, in a quiet corner of Chelsea, has six-bedrooms and six bathrooms. And so keen is he to get some money in that he’s willing to rent it out for £10,000 per week until it’s sold.

‘It’s all quite a shock,’ claims a friend. ‘That’s long been his main home and the centre of his social life.’

Lord Palumbo, 88, who served as chairman of the Arts Council under Margaret Thatcher, was embroiled in a bitter family feud which resulted in his being sued, successfully, by his three children from his first marriage: Annabella, Laura and James, the Ministry of Sound founder now also Lord Palumbo.

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Lord Palumbo, 88, was pictured with Diana at the Vanity Fair summer party at the Serpentine Gallery in Hyde Park

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Peter Palumbo has put his West London home in Chelsea on the market for £16.5million

The siblings accused Palumbo, who’s currently staying in Scotland, of plundering £30million from the £70million family trust and frittering it away on wine, cars and property.

Accounts published this week for the Walbrook Club, the Palumbo family’s private members’ institution in the City of London, show cumulative losses of almost £8million.

Lord Palumbo’s Lebanese-born second wife, Hayat, 74, scaled down her South Kensington-based needlework business Tapisserie in 2018, closing her 32-year-old store and moving her goods to a smaller premises nearby.

When Princess Diana separated from the then Prince of Wales in 1992, Palumbo allowed her to stay at Bagnor Manor in Berkshire.

Two years later, he was pictured with Diana at the Vanity Fair summer party at the Serpentine Gallery in Hyde Park, London.

The party was on the same night as Charles’s television interview with Jonathan Dimbleby in which he admitted adultery with Camilla Parker Bowles.

The evening gown Diana wore that night, by Christina Stambolian, became known as the ‘revenge dress’.

Palumbo, who is godfather to Princess Beatrice, sold Bagnor Manor in 1996 after it was on the market for £7million.

A source close to Lord Palumbo insists that he has is selling the house for financial reasons, saying: ‘He’s nearly 90 – he needs to downsize.’