Prince William and Kate to move into Diana's former home

The couple are expected to move into the Palace within weeks, ahead of their 11-day tour Canada and California from June 30.

St James's Palace confirmed that the couple will move into a "small" apartment at the Palace, which is also home to a number of other Royals.

The move will be temporary, as the couple are believed to want a larger London residence in the long term, in order to have the necessary space to begin a family and to entertain.

In the run-up to their wedding in April, the Duke and Duchess shared living quarters with Prince Harry at Clarence House, the official London residence of the Prince of Wales and the Duchess of Cornwall.

A spokesman for St James's Palace, said: "The couple's official London residence will temporarily become a property at Kensington Palace.

"A number of options for longer-term solutions are still being considered. The couple's main home will continue to be their house on Anglesey, and their Household Office will continue to be based at St James's Palace.

"The property in question at Kensington Palace into which the couple are temporarily moving is small.

"While it more than suffices for occasional visits to London for now, and the Royal couple are very grateful for it, the Duke and Duchess are considering options for a more permanent official London residence. No suitable properties are currently available."

It is understood that the couple will live at Kensington Palace until more spacious living quarters become available at one of the Royal residences.

The Queen is already believed to have offered them the use of apartments at Buckingham Palace, and they are also thought to have also considered apartments at both St James's Palace and Clarence House.

Prince William spent much of his childhood at Kensington Palace after apartments eight and nine were combined in 1981 to create the London residence of the Prince of Wales and Princess Diana.

Both Princes William and Harry attended nearby Wetherby pre-preparatory school in Notting Hill, and Princess Diana often took them to the local shops and restaurants on Kensington High Street, encouraging them to enjoy a "normal" childhood.

Kensington Palace remained the Princess's official residence after her divorce in 1996 and until her death in a Paris car crash the following year.

However, it is understood that the Duke and Duchess will not be moving into the Princess's old apartments, which are currently used as office space.

The couple, who will principally reside in Anglesey until 2013, where the Duke works as an RAF search and rescue helicopter pilot, will also share the Palace with the Duke and Duchess of Gloucester, the Duke and Duchess of Kent and Prince and Princess Michael of Kent.

The Prince and Princess currently live in a five-bedroom flat at the Palace, which until last year they paid only £70 a week for, with the Queen subsidising the £10,000 a month living costs at the flat.

In 2008, however, MPs announced that from 2010, the couple, who are not full-time working royals, would be required to start paying £120,000 a year in rent.

The Palace's previous occupants include Princess Margaret, who lived there until her death in 2002, and Princess Alice who was also a resident until her death in 2004.

Kensington Palace is currently undergoing a £12 million refurbishment, with the first phase, including the renovation of Princess Margaret's old apartments where there will be a permanent display devoted to Princess Margaret and Princess Diana's extensive collection of dresses, due to be complete in time for the Queen's Diamond Jubilee next year.