Prince Harry and Meghan Markle are to "step back" from royal duties and split their time between the UK and North America.

The royal couple, who have just returned from a six-week break staying at a £10.7 million waterfront mansion in Canada's Vancouver Island with eight-month-old son Archie, said they also wanted to "work to become financially independent".

In a bombshell announcement, the Duke and Duchess of Sussex - who wed in 2018 - said they had taken the decision after "many months of reflection".

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In a statement, the couple said: "After many months of reflection and internal discussions, we have chosen to make a transition this year in starting to carve out a progressive new role within this institution.

"We intend to step back as 'senior' members of the Royal Family and work to become financially independent, while continuing to fully support Her Majesty The Queen.

"It is with your encouragement, particularly over the last few years, that we feel prepared to make this adjustment.

"We now plan to balance our time between the United Kingdom and North America, continuing to honour our duty to the Queen, the Commonwealth, and our patronages."

The couple already have significant personal wealth, but it is not considered likely that the Queen, or later the Prince of Wales, would cut off Prince Harry and Meghan even if they were to move overseas full-time. 

Princes William and Harry are granted £5 million a year in total by the Queen from the taxpayer-funded Sovereign Grant.

The brothers can also claim £3.16m a year for 'non-official expenditure', while Prince Harry has additional income of around £1m annually for staffing costs and receives a further £2.5m a year approximately from his father's Duchy of Cornwall estate.

The security bill for the Sussex family, even if they do move abroad, has been put at an estimated £600,000-a-year for taxpayers. 

The announcement followed mounting speculation that the couple were planning to relocate to Canada after a controversial year which saw them criticised over taxpayer-funded renovations to their Frogmore House home in Windsor and their participation in an ITV documentary where they spoke of the pressures of royal life and press scrutiny.

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In an interview with ITV's Tom Brady during a royal tour of South Africa in October, Meghan said not many people had asked if she was okay and admitted living in the public eye as a new mother had been a "struggle".

Critics said it struck the wrong note, coming against a backdrop of visits to poverty-stricken slums. 

During the same 10-day tour, the couple also caused shockwaves when they announced that Meghan was suing the Mail on Sunday for breaches of copyright and data protection law over the publication of a handwritten letter to her from her estranged father. 

Days later, Prince Harry also launched legal proceedings against the owners of the Sun and Daily Mirror newspapers over alleged phone hacking.

The decision to spend part of their time living and working overseas has been seen by some commentators as a bid to escape the spotlight of the British media while they bring up their son, who was born in April.

Their statement added: "This geographic balance will enable us to raise our son with an appreciation for the royal tradition into which he was born, while also providing our family with the space to focus on the next chapter, including the launch of our new charitable entity.

"We look forward to sharing the full details of this exciting next step in due course, as we continue to collaborate with Her Majesty The Queen, The Prince of Wales, The Duke of Cambridge and all relevant parties. 

"Until then, please accept our deepest thanks for your continued support."

However, a statement from Buckingham Palace said discussions were still "at an early stage" and "complicated", prompting speculation that the Duke and Duchess may have rushed out their own statement prematurely.

A spokesman for Buckingham Palace said: “Discussions with the Duke & Duchess of Sussex are at an early stage.

"We understand their desire to take a different approach, but these are complicated issues that will take their time to work through”.

Prince Harry is now sixth in line to the throne after his father Prince Charles, brother Prince William, and Prince William's three children.

As a result, he has more freedom to choose his own path away from palace life and royal duties. 

The decision to split their time across the Atlantic was seen by commentators as an attempt to secure more privacy for the couple, as well as allowing American national Meghan - who grew up in California and worked as an actress in the series Suits, shot in Toronto, prior to marrying Harry - more time in her homeland. 

It is expected that their son, Archie, will hold dual British-American nationality. 
Rhiannon Mills, royal correspondent for Sky News, said it shows "the pressure that they were under" and that Harry is in a "different phase of his life".

She added that Harry has always had a "difficult relationship with the press since his mother died", but having a wife and son has "changed the dynamic of what he wants to do as a working royal".

Not everyone was pleased, however. Good Morning Britain presenter Piers Morgan said Meghan had "ditched her family" and had now "split [Prince Harry] from the Royal Family".