A friend of Prince Andrew’s who was invited to his birthday party and tried to raise money for him has been unmasked as an alleged Chinese spy.

The shocking revelation will cast new doubt on Andrew’s murky finances just weeks after Buckingham Palace gave his accounts a clean bill of health and said his funds came from legitimate sources.

The Chinese businessman believed Andrew was “desperate” and sought to find partners and investors for a financial fund Andrew was instrumental in trying to establish, a report in The London Times says.

In a clear sign Andrew was trading on his royal title and name, the alleged spy was assured by an adviser in Andrew’s camp that he was at the “top of the tree” of the royal family’s affection. He was reportedly also told that the “strength” of Andrew’s relationship with him could not be underestimated.

The involvement of Andrew’s family in this new breaking scandal will pose new questions over their lavish lifestyles.

Andrew has had well documented problems with his controversial friendships. In 2019 he was ejected from his role in the royal family after a disastrous interview in which he said he was “too honorable” to end his friendship with Jeffrey Epstein by phone, instead combining the task with a days-long stay at the dead pedophile’s luxury town house.

His ex-wife Sarah Ferguson was also drawn in to it; she borrowed $15,000 off Epstein when she got into financial difficulties.

The extraordinary and embarrassing connection between the alleged Chinese spy and Andrew were discovered by authorities after the spy, who has now been banned from Britain on national security grounds, was stopped trying to enter the U.K. in 2021 and had the contents of his phone downloaded by border agents.

According to a report in the London Times, agents discovered a letter on the phone from Dominic Hampshire, an adviser to Andrew, which authorized the Chinese national to find Andrew partners and investors in China for a financial scheme known as the Eurasia Fund.

The Times says that Britain’s security service, MI5, “allegedly discovered the businessman, 50, was a member of the Chinese Communist Party and was working for its United Front Work Department, which gathers intelligence.”

He was denied entry to the U.K., a decision which has now been upheld despite an appeal.

The letter from Hampshire reportedly told the Chinese national: “I hope that it is clear to you where you sit with my principal and indeed his family. You should never underestimate the strength of that relationship… outside of his closest internal confidants, you sit at the very top of a tree that many, many people would like to be on.”

The letter hinted at internal subterfuge in Andrew’s camp saying they had “wisely navigated our way around former private secretaries and we have found a way to carefully remove those people who we don’t completely trust… Under your guidance, we found a way to get the relevant people unnoticed in and out of the house in Windsor.”

In a stinging rebuke, Judge Charles Bourne said the alleged spy had “won a significant degree, one could say an unusual degree, of trust from a senior member of the royal family who was prepared to enter into business activities with him.”

He added: “That occurred in a context where, as the contemporaneous documents record, the duke was under considerable pressure and could be expected to value the applicant’s loyal support. It is obvious that the pressures on the duke could make him vulnerable to the misuse of that sort of influence.”

The revelation will heap new pressure on the palace to explain why in a recent finding Andrew’s source of funds, which he is using to support his ongoing occupation of his palatial home, Royal Lodge, were deemed legitimate.

A document found on the suspected spy’s phone said Andrew was in a “desperate situation and will grab on to anything.”

The document, dated Aug. 2021, stated: “Important: Manage expectations a. Really important to not set ‘too high’ expectations — he is in a ‘desperate situation and will grab onto anything’ b. Key message: everything is going well; going to plan c. Do not mention any ‘big numbers’ as this will create unnecessary expectation and pressure.”

It continued: “If he does talk about money: ‘things are going well, discussing with Dominic who will follow up’ b. If he asks about when deals are happening: ‘making’ good progress; not immediately but in the not too distant future. It is better to under-promise and then over-deliver.”

The historian Andrew Lownie who is writing a new biography of Andrew told the Daily Beast that there have long been concerns about the exact nature of his contacts and relationships with China.

“When no one wanted to attend his 60th birthday party, who turned up? Bernie Ecclestone, who was trying to set up F1 in China, and the Chinese ambassador,” he said. “I think this is likely just the tip of the iceberg of the potential scandals surrounding Andrew’s decade as the government’s special representative for trade and investment. There needs to be a full investigation of exactly what he was doing and the records need to be released because there are clear signs of a cover up.”