The Queen's grandson Peter Phillips was watched by his family and his girlfriend as he graduated at Exeter University, yesterday.

The Princess Royal was joined by former husband Captain Mark Phillips to see their 22-year-old son awarded his Bachelor of Science Degree in Sports Sciences along with almost 500 other graduands.

With them was their daughter Zara and 25-year-old Elizabeth Iorio, heiress to a #100m cod liver oil fortune, who sat with the family in the front row of the upper tier of the university's Great Hall.

After the ceremony Miss Iorio joined Peter, still in his graduation gown, as he chatted to his family outside the university's administration block Northcote House.

Peter kissed his mother on both cheeks, received a hug from his father and kissed his sister. Then, after the princess drove her family off in a Range Rover, Peter and Miss Iorio joined fellow graduates outside the Great Hall.

Miss Iorio, who said yesterday she was ''only a friend'', is the daughter of Massachusetts tycoon Theodore Iorio.

A leading horsewoman and member of the US three-day eventing team, she met Peter when being coached by Captain Phillips.

When his turn came, Peter, who was educated at Gordonstoun, doffed his mortar board and walked across the stage to shake hands with the university's Chancellor, Lord Alexander of Weedon.

His parents and sister joined in the applause as he collected his degree certificate.

He was still sun-tanned from a break which he and 50 friends enjoyed in Magaluf, Majorca, at the end of last month to celebrate the end of exams.

On Tuesday, both the Princess Royal and her son attended the thanksgiving service to mark the Queen Mother's 100th birthday in London.

After yesterday's ceremony a friend of Peter's from the same degree course which saw 79 students graduate, fellow ex-Gordonstoun pupil Benjie Goss, 25, from Morayshire, Scotland, said: ''I know he had a very good time at Exeter, he had loved the last three years.''

Mr Goss said that during his time on campus Peter ''just wanted to be normal, and we just took it for granted. He is a good bloke''.