After a year of innuendo, rumour and speculation the Prince of Wales was forced on Thursday to seize control of a potentially highly damaging situation.

For 12 months, the threat has hung over him that the tabloid media would try to publish details of an unspecified allegation by a former servant. This week, the matter found its way to the private chambers of the high court.

It seemed, to him and his aides, that the only way to confront it was to grab the rose by the thorns and so, in a highly unusual move, the Prince “outed” himself to deny allegations that have never been published.

The Sunday tabloid that claimed to have details of an incident involving the prince and another servant has been forced by a libel injunction to remain silent. The same injunction prevents anyone else from discussing the story.

The prince’s private secretary, Sir Michael Peat, acknowledged that it was unusual for the prince to react to an allegation in which he had not actually been named and of which no details had been given.

But there were fears nonetheless that the claims were gaining currency, despite being “totally untrue and without a shred of substance”, he said on television.

“The Prince of Wales has told me it’s untrue,” he added. Anyone who knew the prince at all would appreciate that the allegation was “ludicrous and risible”.

Prince Charles placed himself publicly at the centre of the allegations after a high court judge lifted an injunction against The Guardian newspaper to allow it to identify a former royal servant.

Michael Fawcett, the former personal assistant to the Prince of Wales, can now be identified as the man attempting to stop a Sunday tabloid from printing “utterly false allegations” about him.

Fawcett, who left the prince’s employment following controversy over the selling of royal gifts in the wake of the collapsed trial of the butler Paul Burrell, had sought to keep his name out of the public domain.

The Guardian’s action appeared to catch the prince’s senior aides by surprise. Urgent discussions were held with the prince as he was preparing for a private meeting with Oman’s Sultan Qaboos bin Said.

It was agreed that, although the prince had never been named as the senior royal said to be involved in the unfounded allegation, the rumour was gaining currency. The only way to counter it, it was decided, was for the prince to name himself and issue the strongest possible denial.

The allegation at the centre of the dramatic developments was first referred to in a tabloid newspaper last November by a former aide.

He claimed he had damaging information about a member of the royal family and another member of staff. He claimed he saw an incident between the royal and a palace servant in the early 1990s and added that if it had been publicly aired it would have damaged the monarchy’s reputation.

Then last weekend the Mail on Sunday attempted to publish the full story for the first time. When Fawcett heard of it, his lawyers sought and won a libel injunction.