Angela Kelly, her personal assistant and Paul Whybrew, her personal page, have moved to grace-and-favour homes in Windsor in the past two weeks and other key members of staff could soon follow, The Mail on Sunday said.
The Queen regards Miss Kelly as indispensable -- once describing her as 'like a sister' - and her permanent move to Windsor is regarded within Royal circles as significant, the report said.
As the 80-year-old Monarch continues to struggle with her painful back, Palace aides are discussing moving some royal investiture services -- the ceremonies in which birthday and new year honours such as KBEs and CBEs are awarded -- to Windsor.
Under the plan, the proportion of services presided over by Prince Charles would be increased from one third to a half. While the Queen would conduct her ceremonies in Windsor, Charles would preside over his events at the Palace.
Royal watchers say that shifting her centre of operations from the Palace to the castle signals a step towards semi-retirement because she had always planed to move there when she started to scale down her commitments.
Kelly, 54, who began her career at the Palace in the early nineties as a house-maid, moved out of her apartment in Marlborough House on The Mall earlier in November for a house in Windsor Home Park, within the grounds of the castle.
Kelly is described by colleagues as the Queen's 'gatekeeper' and her 'eyes and ears.'
She is trusted with the task of waking the Queen at 8am with a cup of Darjeeling tea. This summer she was appointed a Member Of The Royal Victoria Order -- an honour given as a personal gift by the Queen.
Paul Whybrew, the 49-year-old son of a bank manager, left his apartment in Kensington Palace ten days ago. He is known to the Queen as 'Big Paul.'
The monarch, who first moved to Buckingham palace in 1937 as Princess Elizabeth, has always preferred to stay at Windsor Castle, regarding the palace as 'living above the shop'.
But a source says her recent problems with a bad back have hastened her decision to shift operations permanently to Berkshire -- encouraged by the Duke of Edinburgh, 85, who has been lobbying her to scale down her commitments and move out of the capital.
About 2,600 people are invested with their honours personally by the Queen or Prince Charles each year. In addition to the 22 ceremonies held at Buckingham Palace, one is organised at the Palace of Holyroodhouse in Edinnburgh and a further one in Cardiff.
Buckingham Palace aides, however, claimed that Kelly and Whybrew had moved out of London for personal reasons.
"We do not comment on personal living arrangements. There are no plans to handle investitures at Windsor -- the palace is very convenient for transport links. The prince already takes a third of the ceremonies every year. There are no plans to move the private office down to Windsor," a spokesman said.
A spokesman for Charles said, "We are not aware of any plans for the Prince to take more investitures."
