Inside the House of Grimaldi: The secret life of Prince Albert

Just before his formal enthronement yesterday as the new ruler of the speck of gold dust on the French Mediterranean coast, Prince Albert II, Prince of Monaco, Duc de Valentinois, Duc de Mazarin, Comte de Farette, Sire de Matignon et de Marchais etc etc, came close to admitting he had several illegitimate offspring.

Albert, 47, the only son of Prince Rainier and Princess Grace, formally recognised last week that 22-month-old Alexandre Coste, the child of Nicole Coste, a former air hostess from Togo, was his son. In an interview with French television on Monday night, he said: "I know that there are other people out there who are in more or less the same situation ... We will give them an answer at the appropriate time." Other "people"? Just how many other people? In the midst of the flummery and the would-be informality of yesterday's ceremony, the 32,000 Monegasque residents faced the prospect of huge changes in the tiny principality in the months ahead. Prince Albert, a fundamentally decent man, promised a Caesar's wife approach to the alleged financial laxity of the statelet's scores of banks.

Not only will Monaco no longer launder the world's dirty money; it will also be seen to be clean, Prince Albert promises. He is considering, he says, abandoning the principle of banking secrecy - the principle on which both his country's, and his family's, fortune has been founded in the past 20 years.

Albert has also said that Monaco, which is somewhat smaller than Hyde Park and Kensington Gardens, will sign the Kyoto treaty and take action to clean the one square mile of air over its territory. This will be a relief to environmentalists everywhere and a powerful incentive to President George Bush to fall into line.

One thing, however, is not going to change. The status of Monaco as a kind of Dallas-sur-Mer, a permanent soap opera of unlikely royal escapades, is assured into a new generation.

The eventful love lives of Albert's sisters, Caroline and Stephanie, have filled glossy magazines for two decades. By comparison, Albert always seemed relatively discreet - and reluctant to marry. Rumours circulated that he was gay.

Now it seems that the floodgates of gossip (held shut by Albert's terror of his autocratic dad) are about to open. Albert's comments on the TF1 news - an honest answer to an honest question but a touch ill-advised - may generate dozens of further paternity claims, real or imagined.

Following the death of Prince Rainier in April, the magazine Paris-Match published pictures of Albert cuddling and feeding a mixed-race toddler. The child's mother, Nicole Coste, who had been Albert's on-off girlfriend for three years, said that the prince had formally recognised that he was the child's father. Alexandre Coste would be looked after financially by Albert, his lawyers said. The boy stood to inherit part of the Grimaldi family fortune. However, he was barred from inheriting the throne.

In his opening declaration in Albert's enthronement ceremony at Monaco cathedral - the Cathedral of the Immaculate Conception - the Archbishop, Monsigneur Bernard Barsi, declared: "We thank the Lord for assuring the continuity of the dynasty." However many illegitimate children Albert proves to have, he has not yet achieved that princely duty for the next generation.

According to the new Monaco constitution drawn up three years ago, only children born of a Catholic marriage need apply. Several previous Grimaldi rulers of Monaco, going back over seven centuries, would not have passed such a test. That was in the pre-Paris Match and Hello! age.

Last week's statement by Albert's lawyer said that the prince hoped his newly recognised son could "spend his childhood and adolescence in a serene and protected environment, kept strictly apart from the media". Some hope. The Mail on Sunday has already published the claims of Tamara Rotolo, a Californian woman who says that she had a daughter with Albert in 1992.

Albert is said to have had scores of girlfriends over the past 30 years. He never married, he has told friends, because all of the women failed one of three tests. First, Prince Rainier did not approve. (This was the fate of Nicole Coste, who was banished from Albert's life after the heir apparent brought her to a royal ball.) Secondly, Albert did not believe that they could match his beloved actress-turned-princess mother, Grace (nee Kelly). Few women, he said, could make the transition from mere fame to royalty. Or thirdly, the women themselves made it clear that they could not live in the Monaco media fish-bowl.

None of these scruples or objections have, it seems, stopped Albert from sleeping around.

The original revelation by Paris-Match in April that Albert had an illegitimate son caused few waves in Monaco. If anything the pictures of a smiling Albert with the handsome toddler were greeted in the principality with relief. Since then, Albert's transition from shy prince to Don Juan has been greeted with some confusion by Monegasques.

There have long been doubts - fuelled it has to be said by Prince Rainier himself - about whether Albert is up to the job. The Prince of Monaco is one of the few absolute monarchs left on the planet. He has an advisory parliament and a first minister (traditionally a Frenchman). Nonetheless, Rainier ruled like a cross between an autocratic city boss and a medieval sovereign. He would even choose the colour of the curtains in the Monte Carlo casino.

Monaco's tax-free status and position on the Riviera coast have made it a target for all kinds of ambitions and manoeuvres. Rainier defeated de facto take-over bids from President Charles de Gaulle, the late Greek billionaire Aristotle Onassis and the Italian, and more recently, the Russian mafia. In recent weeks, Albert has been going out of his way to prove that he will be an effective prince. He has also been taking pains to demonstrate that he will be a different kind of ruler from his father. He has even implicitly - and almost explicitly - criticised his father's secretive and autocratic style of rule.

In an interview last week with Le Monde magazine, Albert said: "The [old palace] system was very heavy. Because they knew that my father didn't like meeting people, and because they were afraid of his temper, his advisers overprotected him."

In the interview, Albert came over as an intelligent, well-intentioned man. Rainier would meet criticism of Monaco's lax banking laws with a bark or a shrug. Not Albert. He said that: a) the principality was never as bad as people claimed; b) that much had already been done to clean things up; c) that he would do much more. "I will place morality - honesty, ethics - at the centre of ... all decision-makers in the principality," he said.

This came close to suggesting that Rainier's government had not been bothered with such moral questions. The rise of Monaco in the past 20 years from a casino-with-state-attached to a micro-country with a €10bn (£6.9bn) annual turnover has largely been achieved by opening the door to mysterious foreign banks. More than half of the national income comes from financial transactions.

The OECD and French parliament suggested five years ago that Monaco had become a "pariah state", welcoming dirty money from drugs barons and terrorists as well as tax evaders. Albert said that this was exaggerated but ... "Nothing is engraved in stone. For me [ending banking secrecy] is not a taboo. Secrecy gave us an advantage over other places but it must not be an obstacle to our insistence on ethics and openness."

Instead, Albert said, he would like Monaco to become a laboratory for biotechnology, medical and environmental research. All palace advisers have been ordered to hand in their resignations by Wednesday. It is clear that some of the older flunkies will not be re-appointed.

Royal romances apart, Monaco has always been a difficult place to comprehend. The public searchlight turned permanently on the escapades of Stephanie and Caroline left much else that happened on "the rock" in shadows. The bonking distracted the world from the banking.

Financial Monaco-watchers have been divided in recent days. Some believe Prince Albert means what he says. Frédéric Laurent, a writer on Monaco, said: "When his father was alive, Albert had the right to shut up. No more ... but he is a profoundly liberal man and a believer in social justice ... he is determined to make a difference." On the other hand, Roger-Louis Bianchini, a French investigative journalist who has written about the secretive business world of Monaco, said: "The whole of Monaco's prosperity depends on its banking rules which allow money to flow in from doubtful sources ..." Will Albert, he asks, repeal the law which makes it impossible for foreign governments to take action against Monaco residents suspected of financial wrong-doing?

Everything suggests Albert means what he says. The problem is that he is starting a little late. He has the personal legacy of all those bachelor years to deal with and the public legacy of his father's willingness to force feed Monaco with doubtful foreign cash. The enthronement of Prince Albert II ended last night with a giant fireworks' display over the Mediterranean. Many more Monegasque pyrotechnics can be expected in the months ahead.