The Scot being held in a high security prison facing charges of trying to blackmail a member of the royal family is said to have led a "Champagne Charlie" lifestyle in London.

The Scot being held in a high security prison facing charges of trying to blackmail a member of the royal family is said to have led a "Champagne Charlie" lifestyle in London.

However, in Aberdeen, where he was brought up, even family are puzzled as to how he funded the jetset lifestyle he has apparently been leading.

Ian Strachan, 30, who is better known in Aberdeen as Paul Adalsteinsson and who describes himself as a property developer, and Sean McGui-gan, 40, have been in prison since appearing at the City of Westminster Magistrates' Court on September 13 charged with blackmail.

They are due to appear at the Old Bailey on December 20, four days after Mr Strachan's 31st birthday, after allegedly threatening to release a video they claimed indicated that the royal had engaged in a sex act with an aide.

It is understood the allegation they will face is that they demanded £50,000 but a police sting ensured the evidence was seized and the men were arrested with no money changing hands.

The royal's identity cannot be revealed for legal reasons but he or she is said not to be a senior member of the family.

Mr Strachan was known to fellow pupils at Aberdeen Grammar School as Paul Adalsteinsson but it is believed that after he left he adopted his mother's maiden name as his surname and one of his middle names as his Christian name.

Under the name Paul Einar Ian Adalsteinsson he is listed as a company director at a number of addresses in Aberdeen but at some, at least, he is unknown.

At one property, which is listed as his address with Companies House, the owner for the past five years said: "There has been a number of callers and mail for him, clearly relating to debts, but we have no idea where he went. I think it was his mother's partner who owned this house before us. Not long after we bought it fraud squad officers from the Metropolitan Police called round."

His uncle, Alastair Hutcheson, the owner of the Cults Hotel on the outskirts of the city, said he had not seen him for around 20 years and he believed he had moved to London where he was living with his mother. Asked whether he might own the properties listed under his name in Companies House, Mr Hutcheson said: "I doubt if Paul owns the shirt on his back."

His father, Charlie Adalsteinsson, lives with his wife Susan in Cruden Bay, north of Aberdeen and works at a fish processing company in a small unit in Fraserburgh.

"I have absolutely nothing to say," he said yesterday as he moved fish boxes using a fork- lift truck.

The couple have three children, Martin, Lauren and Kyle, the youngest, who is 17.

Mr Adalsteinsson and his first wife, Elizabeth, Paul's mother, also had another son, Scott, who lives in Aberdeen.

Mr Strachan is being represented by Italian lawyer Giovanni di Stefano, whose previous clients include executed Iraqi dictator Saddam Hussein, who claims there is no tape of a sex act in existence.

"There are tapes of an assistant to a member of the royal family boasting of how he received a sex act from this royal family member. Whether that act took place I do not know." Mr Di Stefano has also insisted that at no time did his client call the royal household and that he called the private business office of the individual concerned.

He said Mr Strachan had never asked for any money and that it was, in fact, the office of the individual concerned who first offered money. He added there was absolutely no evidence against his client, and that he would be trying this week to have Mr Strachan freed on bail.

The case is the first in modern times that a member of the royal family has been targeted in an alleged blackmail plot.

In 1891 the future Edward VII discussed with his solicitor paying off two prostitutes he had visited in return for letters he had written to them. Details emerged only in 2002 when the letters were sold for £8220 at Bonhams, the auctioneers.