The Queen was reportedly refused an anti-poverty grant to help heat her palaces because Whitehall officials feared it would cause a public relations backlash.
In an effort to cut the Royal Household's soaring electricity and gas bills, a senior aide wrote to the Department for Culture, Media and Sport in 2004 to ask if the Queen would be eligible for a handout from a £60m energy-saving fund.
He complained that the cost of royal utilities, which doubled in 2004, stood at £1m a year and had become "untenable" and that the £15m Government grant to maintain the Queen's palaces was inadequate.
The request for a grant to replace four combined heat and power (CHP) units at Buckingham Palace and Windsor Castle was turned down in August 2004, according to documents obtained by The Independent under the Freedom of Information Act.
In an apologetic email sent to the Palace, it was explained that the handouts were aimed at schools, hospitals, councils and housing associations for heating programmes which benefit low-income families.
The official also expressed concern that if Buckingham Palace was given money from the fund it would lead to "probable adverse press coverage".
The email said: "I think this is where the Community Energy Funding is directed and ties in with most allocations going to community heating schemes run by local authorities, housing associations, universities etc.
"I also feel a bit uneasy about the probable adverse press coverage if the Palace were given a grant at the expense of say a hospital. Sorry this doesn't sound more positive."
A Buckingham Palace spokeswoman declined to comment on the disclosures.