THE BBC have agreed to pay Princess Diana's private secretary a "substantial sum" in damages over the Martin Bashir Panorama interview scandal.

       Patrick Jephson - who aided the Princess of Wales from 1988 to 1996 - said the journalist had "seduced and betrayed" her to bare her soul.

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       Diana's private secretary Patrick Jephson has now reached a settlement with the BBC Credit: PA 3

       Bashir tricked the vulnerable princess into baring her soul in the Panorama chat Credit: PA

       The broadcaster said they apologised "unreservedly" to Jephson for the way Bashir obtained the explosive 1995 interview.

       A BBC statement said: "The BBC and Commander Patrick Jephson have reached a settlement following publication of the Dyson Report.

       "Commander Jephson was the Private Secretary to Diana, Princess of Wales.

       "The BBC accepts and acknowledges that serious harm was caused to Commander Jephson as a result of the circumstances in which the 1995 interview with Diana, Princess of Wales was obtained, which have become apparent as a result of the Dyson Report.

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       "The BBC apologises unreservedly to Commander Jephson for the harm caused to him and has paid his legal costs.

       "The BBC has also paid Commander Jephson a substantial sum in damages, which he intends to donate in full to British charities nominated by him."

       Years on from the infamous interview, an independent investigation was launched to find out how Bashir had convinced her to talk.

       The damning Dyson report revealed the "rogue reporter" forged bank statements and spun wicked tales to win vulnerable Diana's trust.

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       It was found that Bashir used the documents to persuade her that officials were being paid by MI5 and the media for information about her.

       He even outlandishly told Diana her phone was bugged and Prince Charles was having an affair with their sons’ nanny.

       The report revealed the BBC had then "covered up" Bashir's sensational lies "without justification".

       Jephson had told of his "outrage that somebody should have exploited the princess in this way," after watching the spellbinding sitdown.

       He said: "Knowing the princess as I did, making her perform like this was a combination of seduction and betrayal.

       "Panorama burnt her bridges with the rest of the Royal Family and cut her off, fatally, from the protection of the royal institution."

       Watched by 23million viewers, Diana questioned the suitability of Prince Charles to be king, admitted her own infidelity and revealed her husband’s — in a line that will never be forgotten.

       "There were three of us in this marriage so it was a bit crowded," she said, her sorrowful eyes ringed with heavy, black liner.

       An explosive documentary detailing Bashir's deception also revealed he and his team had "slipped into Kensington Palace" disguised as workmen.

       Earl Spencer blamed Bashir over her tragic death on the expose saying his "vulnerable" sister was left with no protection when she was killed in a car crash in Paris in 1997.

       He suggested his sister lost faith in those around her after being duped into taking part the BBC scoop after her marriage collapsed.

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       Diana’s biographer Andrew Morton said: “She lived in a world of anxiety and possible surveillance.”

       He alleged that Bashir very cleverly and in a very sophisticated way played on that anxiety.

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       The broadcaster apologised 'unreservedly' to the Commander Credit: PA