The slopes of Switzerland's Klosters ski resort were thick with snow on March 28, but Prince William's frosty relationship with the media was thawing. Posing for a traditional photo call, William, 21, told reporters he was enjoying his vacation with Prince Charles and some mates and "having a good laugh."

He was not amused for long. Four days later, paparazzi pictures emerged of the prince looking cozy with one of those mates—fellow University of St. Andrews student Kate Middleton, 21—blowing open a relationship the pair have kept secret for about a year. The romance with Middleton "has been going on for a bit," a friend confirmed to PEOPLE. "She is his girlfriend."

Middleton caught William's eye in his first semester at the Scotland university when they shared an art history course. Rumors about the true nature of their relationship have buzzed since they became roommates in September 2002—along with two other students—escalating last year when the pair, now juniors, were spotted at a rugby tournament "lying on the ground together...gazing into each other's eyes," according to one onlooker. The oldest child of Michael and Carole Middleton, who run a mail order company selling children's party toys, Middleton grew up in rural Berkshire, west of London. At Marlborough College, a prestigious high school, she excelled at field hockey and cross-country running, making her a good match for sports-mad William, who will play water polo for Scotland's universities this month.

But would-be princesses of the world need not despair just yet. Says a friend of William's: "It would be wrong to read into it that wedding bells are around the corner."