The owners of the luxury department store Harrods have announced that they will be removing the statue of Diana, Princess of Wales and her lover, Dodi Fayed.

The golden statue has been based inside the Knightsbridge store since 2005 after it was unveiled by the then-owner Mohammed al Fayed.

Harrods, which is now owned by the Qatari royal family, made the decision following news that a new one was to be constructed at nearby Kensington Palace.

Michael Ward, its managing director, said: "We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al-Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years.

"With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr Al-Fayed and for the public to be invited to pay their respects at the palace."

The statue will be returned to the Fayed family with planning for the move to take place over the next few months.

The Telegraph reported that the announcement was probably part of a wider plan to woo back the British royal family to the store.

Royals stopped shopping at the popular central London site after Fayed accused the Duke of Edinburgh of ordering the murders of his son and Diana by staging the 1997 Paris car crash which resulted in their deaths.

Harrods was first awarded a royal warrant in 1913, but this was removed in 2000 following a "significant decline in the trading relationship over several years."

In 2000, the Queen opted to choose Tesco over Harrods as her new provider of Christmas puddings.

The Al Fayed family said in a statement: "We are grateful to Qatar Holdings for preserving the Dodi and Diana memorial at Harrods until now.

"It has enabled millions of people to pay their respects and remember these two remarkable people. It is now time to bring them home."