Why shunned Fergie turned down her invite to the Diana service

It is understood she feels attending "would not be right" as she has never felt welcome at royal events.

Although relations with the Royal Family have been strained publicly, Sarah, 47, continues to have a close relationship with the Queen.

Friends said that her decision was "very straightforward".

"She has not been on a royal guest list for some years and it has been made clear that the family do not want her to attend royal events," one said.

The Duchess's daughters, Princess Beatrice, 18 - one of Diana's 17 godchildren - and Princess Eugenie, 17, will be attending together with their father, Prince Andrew.

Five years ago the Duchess decided to opt out of public royal occasions after a series of discussions with the Queen.

It followed heated speculation that she was "banned" from the Golden Jubilee celebrations due to the ongoing rift between her and the rest of the family.

The last major royal event the Duchess attended was the Queen Mother's funeral at Westminster Abbey in April 2002 when she was forced to sit apart from her children and not join the rest of the royal party.

Close friends said she had long been made to feel like an outcast and would have felt "uncomfortable" marking the occasion with the Royal Family.

"Fergie's point is that she has not been embraced by the Royal Family in recent years," one friend said.

"She has been excluded from many family events and it makes her feel uncomfortable on such occasions.

"She understands that and it made it easier for her to come to the decision to stay away.

"Even though she was one of Diana's closest friends within the Royal Family and not a day goes by when she does not think about Diana, she has turned down the invitation.

"She was grateful to be asked, but feels it would not be right to go to it."

Rather than attending the ceremony due to be held on August 31, Sarah is planning her own private remembrance of her close friend.

A friend added: "She is very proud that the girls will be there and will also be representing her.

"Although she will not be going to the service, Fergie will be remembering Diana, one of her dearest friends, in her own way."

The decision comes amid concerns at the prime role that the Duchess of Cornwall will play in the service which has been organised by Diana's sons, Prince William and Harry.

Sources revealed yesterday that the presence of the "third person", whom many still blame for destroying Diana's marriage, had caused considerable disquiet among those invited to the service.

"A number of people who have been invited will feel very uncomfortable about the prime role that Camilla will have in it," an insider said.

Although Sarah and Diana quarrelled over the Duchess's autobiography shortly before Princess Diana died, their relationship had always been very close.

A spokesman for the Duchess of York confirmed that she will not be at the service to be held at The Guards' Chapel at Wellington Barracks.

Along with William, 24, and Harry, 22, it has been organised by Diana's brother, Earl Spencer and sisters, Lady Sarah McCorquodale and Lady Jane Fellowes.