Mrs Isbilen has told the High Court she now believes the payment was connected to Mr Turk’s appearance at the event.

Mr Tickner wrote to the Duke of York in March last year, but he “declined” to respond to questions or give any account of his relationship with Mr Turk. He has repaid the £750,000.

Money given as gifts is not liable for tax, experts have pointed out.

Richard Murphy, professor of accounting practice at Sheffield University Management School, said if the money had been received as part of a commercial transaction, then tax would be due on the sums received.

Prof Murphy said: “It would seem that it would be worth HMRC asking the Prince some questions in regard to his business affairs and in the context of these payments.

“The question to be asked is whether there was a payment received for services supplied. Was there some conditionality to his gift? Was there some agreement for an exchange by which both sides benefitted? If it was a commercial transaction, it would appear to be taxable.”

Prof Murphy said the sum might be taxable at 45 per cent, the top rate of income tax. The tax specialist also pointed out that by returning the money, that implied the cash may not have been a gift.

Mr Turk, who has a worldwide freezing order on his assets and has surrendered his passport, denies the allegations against him. He is being pursued by Mrs Isbilen through the High Court for the return of her money.

A spokesman for the Duke of York said that they could not comment on ongoing court proceedings.

A spokesman for the Duchess of York said: “The Duchess was completely unaware of the allegations that have since emerged against Mr Turk. She is naturally concerned by what has been alleged against him.”

On Friday, those close to her claimed she believes she has done nothing wrong.

She was introduced to Mr Turk through the Duke of York, her ex-husband, with whom she still lives.

The Duchess claims she was owed £225,000 by renewable energy company Pegasus Group Holdings for her role as brand ambassador, a job she was appointed to in July 2019.

She said at the time she hoped to be involved in a project to install Pegasus’ mobile solar power units in Africa.

She was due to be paid in installments by Pegasus, according to those familiar with the deal, but Mr Turk was approached – by the Duke and the Duchess – with a request that he pay her the full amount she was owed and that he then reclaim the money from Pegasus.

The Duchess has stressed she had no idea that the money from Mr Turk was anything other than “entirely respectable”, since at the time Mr Turk was heading up Heyman AI, a digital banking firm that has since gone into liquidation.

In a statement on Friday evening, Princess Eugenie said: “On 31 March 2022 I received a letter from solicitors Peters & Peters representing their client Nebahat Evyap Isbilen in her claim against a Mr Selman Turk, and various companies. I know neither Mrs Isbilen nor Mr Turk (nor any other details of the claim) and I was surprised to receive this letter, which asked me to explain two payments made to my bank account in October 2019, which I understood to be gifts from a long-standing family friend to assist with the cost of a surprise party for my mother, Sarah, Duchess of York’s sixtieth birthday.

“In early October 2019 I had received a call from our family friend saying that he wanted to make a financial contribution towards my mother’s birthday party to assist with the catering costs. I suggested that any contribution could be made directly to the caterers, but in the event provided my account details to which two payments were made totalling £25,000, which I then transferred on to the company organising my mother’s party.

“I am now consulting with my lawyers who I have asked to respond to Peters & Peters on my behalf to assist in their inquiries.”