During a visit to India on Nov. 4, Prince Charles got to sound the clapperboard on the first scene of a new film. But even Bollywood couldn't have concocted the kind of melodrama that awaited him back home. Still smarting from revelations about his marriage to Princess Diana in A Royal Duty, the tell-all book by her former butler Paul Burrell, the prince returned to London Nov. 9 to face another round of rumors set off by yet another ex-servant. A year ago Charles's former valet George Smith told a British tabloid that he had been brutally raped by a servant on the prince's staff and seen "a member of the royal family" in a compromising situation with a palace servant. Now the same paper, the Mail on Sunday, was poised to reveal that the royal was, in fact, Prince Charles.

Tipped off when the Mail on Sunday called the palace for comment days earlier, Michael Fawcett, a former senior aide and right-hand man to Charles, won a court injunction preventing the Mail on Sunday from publishing any further details of Smith's tale.

In the meantime Charles broke his royal silence. With the rumor mill in overdrive, his office released a statement identifying Charles as the royal in Smith's story. "The speculation needs to come to an end," the statement read. "The incident which the former employee claims to have witnessed did not take place."

What incident might that be, exactly? There's the rub. With the gag order in place, the tabloids used innuendo to fill in the blanks. The headline "Is Charles Bisexual?"—courtesy of the lowbrow News of the World—screamed from newsstands across the country. The answer—"Emphatically NOT," according to Mark Bolland, his former PR person—was in smaller type in the story's text. Furthermore, Smith, who is so far the sole source for the allegations, is a notoriously problematic witness: an admitted alcoholic, he has been voluntarily committed to a psychiatric clinic for treatment of posttraumatic stress related to Falklands War service. Many in the British press regard his story as untrue. "That's a widely held belief across Fleet Street," says Daily Mirror correspondent James Whitaker. "But unfortunately the media keep [repeating] it because it sells papers." Smith, who has said he still stands by his story, received about $160,000 to talk to the Mail on Sunday. He says that in 1996 he told his story to Diana, who taped their chat.

That even this latest woe to befall Charles can be traced back to Diana is not lost on royal watchers. "It's the princess coming back to wreak havoc on the house of Windsor," says Burrell. "She is just living on long after her death." Whether Charles will survive the haunting to become a credible king is a topic of debate in Britain, where a Mail on Sunday poll found that 39 percent believe Prince William should succeed the Queen. Much depends on how Charles handles the brushfires that keep igniting in his own household. "The whole thing is unattractive and sordid and degrading," says one of Charles's chums. "And it won't go away."

Simon Perry, Pete Norman, Bryan Alexander and Susan Clarke in London