William and Kate are already in Norfolk, as had been planned, and are looking forward to spending time with the rest of the Royal Family at Sandringham over Christmas, a royal source said.
The Buckingham Palace lunch is a private event for senior royals and their wider family who won’t be at the Christmas celebrations at the King’s Norfolk home.
Prince Andrew decided not to attend the gathering after speaking to his ex-wife and close friend Sarah, Duchess of York, according to a source, amid continuing speculation over his links to an alleged Chinese spy.
The King’s brother had already withdrawn from joining senior royals at Sandringham for the festive period.
Businessman Yang Tengbo, who was banned from the UK, was named at the High Court as a “close” confidant of Andrew after an anonymity order was lifted on Monday.
He has denied being involved in espionage and said he has “done nothing wrong or unlawful”.
Mr Yang helped set up the Chinese arm of the Duke of York’s Pitch@Palace initiative, and twice visited Buckingham Palace in 2018 to meet with the late Queen’s second son.
He is also said to have entered St James’s Palace and Windsor Castle at Andrew’s invitation.
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Last Friday, before the businessman was named, the duke’s office said Andrew “ceased all contact” with him when concerns were first raised about him.
Andrew met Mr Yang through “official channels” with “nothing of a sensitive nature ever discussed”, a statement said.
The duke, now 64, has disappeared from public life since stepping down from official duties in 2019 following the furore over his friendship with convicted US sex offender Jeffrey Epstein.