HANDSOME, ATHLETIC AND swooningly eligible, Spain's Prince Felipe is known in his country as El Principe de Sueños—the Prince of Dreams. So it was only to be expected that after the 28-year-old heir to the throne was pictured last year in Spanish magazines romping in St. Martin, the West Indies, with New York City student and model Gigi Howard, 26, the press—ever watchful of Felipe's love life—would thirst for details. Carlos Hugo Arriazu, the freelancer who had snapped the St. Martin shots, even flew to Howard's Statesboro, Ga., hometown to nose around. "When that guy Carlos was here, he was asking about who Gigi dated in high school, what clothes she wore, when her birthday was," recalls Nancy Welch, a Statesboro Herald reporter and friend of Howard's. "I told him to look it up at the courthouse."

As it happens, Arriazu may have gone beyond the courthouse. Now standing trial in Manhattan state supreme court, he—along with two hired assistants, Miami private eyes Carlos Fernández and Luis Jiminez—is accused of tapping Howard's Manhattan telephone in his quest for princely gossip. According to court testimony, the trio's escapades began in June 1995 when they enlisted Thomas Busciglio, an amateur wiretapper, convicted Florida cocaine dealer and—unbeknownst to them—informant for the Dade County police.

After ambushing Howard in Central Park with questions about her relationship with Felipe ("You would have to ask him," she told them), Arriazu allegedly brought in Busciglio to install the tap the next day on the phone line of her Upper West Side apartment building. Taking the stand last week as the prince vacationed on the Spanish resort island of Majorca with his parents, King Juan Carlos and Queen Sofia, Howard testified in a soft southern drawl that she had heard a "loud clicking" while talking to two friends on the phone that night. Arrested near Howard's building, Arriazu, according to police reports, defended his actions by saying it is customary in Spain to resort to eavesdropping.

Arriazu's bungled sleuthing may-have been in vain. Since reportedly meeting in Manhattan in 1995, Felipe—then earning his master's in international relations at Georgetown University in Washington—and Howard, now studying child psychology in New York City, haven't exactly declared their passion for one another. Though a family friend of Howard's says she and the prince have been "dating for a year plus," on the stand Howard denied any current romantic involvement, and last May told PEOPLE that she and Felipe are just "good friends." Famously secretive about his private affairs, the prince—who in 1993 ended a long-standing relationship with Isabel Sartorius, the daughter of a Spanish aristocrat—has been equally noncommittal. Just this spring, while chatting with Spanish Air Force families, he was overheard saying, "There's plenty of time for [finding a girlfriend]," a remark that turned up on the evening news.

To all appearances, the Olympic yachtsman (at Barcelona in 1992) and jet fighter pilot for the Spanish Air Force seems to revel in his single status. Arriving with three male friends around 1 a.m. on Aug. 1 at Majorca's Calita Beach Club disco, he ordered a shot of Ballantine's scotch before being swarmed by admirers, with whom he chatted politely well into the small hours. Recalls a waitress who identified herself only as Rocío, 23: "I tried to keep calm, but when I served him my knees went weak. He is so imposing, you can't help but become totally flustered." Adds Ana Romero, society editor for Madrid's El Mundo newspaper: "He has a huge group of friends. He parties a lot. And like any healthy young man, he is definitely dating many women."

But while the prince may be a world-class charmer, royal watchers say any would-be princess must first pass muster at the family's main homestead, Zarzuela Palace. Reportedly disapproving of Howard—the daughter of Richard, a local telephone company executive, and Patricia, a homemaker—the queen, according to one royal watcher, may have been involved in planting a few of Howard's modeling shots in Spain's ¡Hola! magazine in June. "You can't have a future queen in the pages of ¡Hola! wearing leopard-skin attire," he explains. "You could see the hand of someone close to the queen behind [the photographs]." Says Romero: "The day Felipe has an official girlfriend, she will be presented in the palace, and she will be royal."

With Arriazu, Fernández and Jiminez now facing up to four years in prison and fines, Howard—not seen with the prince since the two strolled through Manhattan last October—has moved from her Upper West Side apartment and, of course, disconnected her phone. But back in Statesboro, her friends are still holding out for a fairy-tale ending. "She's really nice, beautiful, witty and charming," says Howard's old friend Nancy Welch. "They'd be lucky to have her as their future queen."

JANICE MIX
NINA BIDDLE in Majorca, MARISA SALCINES in Statesboro, JANE WALKER in Madrid and LIZ McNEIL in New York City

  • Contributors:
  • Nina Biddle,
  • Marisa Salcines,
  • Jane Walker,
  • Liz McNeil.