The first hearings of the inquest into the death of Diana, Princess of Wales, will now be held in public after an embarrassing climbdown by the judge in charge.

Dame Elizabeth Butler-Sloss, the former senior judge, announced yesterday that she had backed down over plans to hold in private the preliminary hearings scheduled for early January. A Judicial Communications Office spokesman said that she had been persuaded to change her mind because of public interest in the case.

The decision handed a victory to Mohamed Al Fayed, the owner of Harrods, who had declared that he would lodge a legal challenge over private proceedings.

Mr Al Fayed, the father of the Princess’s friend, Dodi Fayed, who died in a car crash with her, had said that he would oppose any move to hold the inquest behind closed doors, including preliminary hearings. Those hearings are due to take place on January 8 and 9, nearly ten years after the accident in Paris that killed the Princess and Mr Fayed.

A Judicial Communications Office statement said: “She [Dame Elizabeth] decided to reconsider. She has discretion in the matter and was persuaded that the strong public interest in the cases justified the meeting being held in open court. The reasons she had in mind that led her to conclude initially that the meeting should be held in private were entirely pragmatic, such as the size of the courtroom.”

The preliminary hearing will decide such matters as whether a jury will sit on the inquest. If so, under the rules governing the inquest, its members would be made up of Royal Household members, as Diana was still considered a member of the Royal Family when she died.

Dame Elizabeth will also decide on whether the Princess and Dodi’s inquests will be held jointly or separately.

Mr Al Fayed welcomed the decision, but said that he would not tolerate any more attempts to conceal the truth: “I’m encouraged by this decision, although regret it only came about as a result of threat of legal action. The public and I have a right to know how my son and Diana, Princess of Wales, were really killed.”

Diana, 36, and Dodi, 42, died on August 31, 1997, when the car they were travelling in hit a pillar in a Paris underpass. A French investigation blamed Henri Paul, the driver, for drink-driving at high speed.

Lord Stevens’s investigation into their deaths is due on December 14. His report will show no evidence to contradict the French findings that the Princess died in an accident that was caused by excessive speed after the driver lost control of the Mercedes in August 1997.

The report will also dismiss claims that the Princess was engaged to Dodi Fayed, or even pregnant by him. By law, the inquest must be held in public, unless there are national security reasons that require it to be in private. However, there is no requirement for the preliminary hearings to be held in public.

One problem facing Dame Elizabeth was that the inquest into the Princess’s death was opened and adjourned by Michael Burgess, the Surrey Coroner, in 2004. If the hearings in January are regarded as a continuation of that inquest, it would follow that they should be held in public.

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