FORMER Prime Minister John Major, guardian to princes William and Harry, is to apply in the High Court for extra powers to protect their interests, it was announced last night.

Lawyers for Mr Major will go to court before Christmas to seek powers to protect the princes' financial interest in souvenirs and memorabilia related to their late mother, Diana, Princess of Wales.

Boodle Hatfield, representing Mr Major as guardian, said in a statement that the application would deal with circumstances which could not have been foreseen, to ensure that appropriate trusts and powers to benefit the princes were conferred.

This is understood to refer to the extra value placed on anything bearing Diana's image, signature or name after her death in a car crash in Paris, and to ensure that her sons, and charities, would benefit.

The executors of the estate would also welcome further powers to enable them to control and police the memorabilia.

It was also announced that lawyers Mishcon de Reya, who act for the Diana, Princess of Wales Memorial Fund, would stand down from acting in general for the executors - her mother, Mrs Frances Shand-Kydd, and elder sister, Lady Sarah McCorquodale - though they would continue to act for them on certain matters.

The statement issued by the three law firms which deal with the administration of the estate - Boodle Hatfield, Mishcon de Reya and Lawrence Graham - said there would shortly be a joint application to the High Court.

It was understood this would be as soon as possible, and certainly before Christmas.

''The application on agreed terms will be made by John Major as guardian to the two princes and the executors will also be parties to the application.

''The application would deal with circumstances which could not have been foreseen: first, to ensure that appropriate additional trusts and powers for the benefit of Prince William and Prince Harry, whose interests are thereby protected, including powers to benefit charity, are conferred; second, the executors would welcome further additional administrative powers to enable them to control and police the intellectual property rights now held by the estate.''

The statement also said there had been much press speculation on the extent of intellectual property rights - covering Diana's image, signature and name - which are owned by the estate.

It went on: ''Mishcon de Reya act for the Diana, Princess of Wales Memorial Fund which in relation to those property rights is, or is likely to be, in a contractual relationship with the estate of the princess.

"Accordingly, Mishcon de Reya now feel it would be appropriate to stand down from acting in general for the executors, Mrs Frances Shand-Kydd and Lady Sarah McCorquodale, although the executors wish Mishcon de Reya to continue to act for them on certain matters.

''The executors have therefore instructed Martyn Gowar of Lawrence Graham to act for them in the general future administration of the estate.''

Last night, trust expert and solicitor Mark Stephens explained that Mr Major was making the correct legal move. ''The princes are entitled to all the income from the exploitation of Diana's trademark but they are giving it to the memorial fund,'' he said.

''So what is effectively happening is that John Major, as their guardian, is seeking the court's official approval to pass the trademark rights from the princes on to the memorial fund.

''John Major needs to gets the court's sanction to approve the move because he is giving money away from minors.''

Mr Stephens explained that if the court's approval was not provided to hand over the trademark, the two princes could theoretically sue the former prime minister when they reach 18 for breach of trust for giving away their assets.

q A 6ft high iron railing fence could be built around the island grave at the family home of Diana, Princess of Wales.

Plans have been drawn up for the blue fence to be erected around the island and its surrounding lake in the grounds of Althorp House near Northampton.

Daventry District Council said yesterday it had received the planning application from officials at the Althorp Estate, now owned by her brother, Earl Spencer.

The plans will have to be considered by council officials and English Heritage before they can be given the go-ahead.