Peter Phillips has stepped down as a trustee of a charity which will distribute funds from the Queen's 90th birthday lunch because of a conflict of interest.
Mr Phillips, 38, the Queen's oldest grandchild, has been the driving force behind the Patron's Lunch, a street party being staged in The Mall to mark the monarch's patronage of more than 600 charities and organisations.
But there is a conflict of interest as he is a director of Sports and Entertainment Ltd (SEL), a global events agency which came up with the idea for the not-for-profit event and will receive an undisclosed fee for staging it.
And the 38-year-old is also a trustee of the Patron's Fund, which will use surplus money from the street party to support specific initiatives and projects run by the Queen's charities.
The Queen is said to be excited by the prospect of 10,000 guests joining herself, the Duke of Edinburgh, the Duke of Cambridge and Prince Harry in The Mall this summer for the sit-down celebration costing £150 a ticket.
The Patron's Lunch will honour the monarch's lifetime dedication to service and will be the culmination of a weekend of national events next summer marking the monarch's official 90th birthday.
A spokeswoman for the Patron's Lunch said: "Mr Phillips originally became a trustee in compliance with the Charity Commission's recommendation that there should be a minimum of three trustees.
"It was, however, always Mr Phillips's intention to step down as a trustee once the Patron's Fund was fully operational to ensure that there was no perceived conflict of interest and to ensure the integrity of the event and the charity were maintained.
"The process for appointing Peter's replacement as a trustee is well under way."
Mr Phillips said last November he would step down as a trustee but he still effectively holds the post until a replacement is found, expected to be very soon.
National celebrations to mark the Queen's 90th birthday will be held in June.
A service of thanksgiving attended by the Queen and Duke of Edinburgh will be held at St Paul's Cathedral on Friday June 10. The following day the traditional Trooping the Colour ceremony, also known as the Queen's Birthday Parade, will be staged in Horse Guards Parade, and on the Sunday, the street party.
A Charity Commission spokesman said: "The charity raised with the commission during the registration process a potential for a conflict of interest with regards the appointment of a key supplier."
The commission gave the Patron's Fund advice and it later confirmed the decision to appoint a key supplier, SEL, would be made without Mr Phillips's involvement.
The spokesman added: "The commission did not have any concerns at the time about how the decision was made."