Dodi 'told jeweller of engagement'

Alberto Repossi also alleged that American spies would have known about the imminent announcement because, he said, they were bugging Dodi's calls.

Mr Repossi, who has a shop opposite the Ritz Hotel in Paris owned by Mohamed al Fayed, said Dodi made the revelation in a telephone call to discuss re-sizing a ring he had ordered.

He claimed to have subsequently met the couple secretly in a hotel in St Tropez in the south of France to show them the ring and other jewellery which he thought the Princess might be interested in.

But, giving evidence to Diana's inquest by video link from Paris on Monday, Mr Repossi said he could not remember which hotel it was.

He told the jury that he had been told by staff at the Monte Carlo branch of his store on August 5 that the couple had visited, asked for him and left when he was not there.

He claims he received two phone calls from Franco Mora, the then manager of the Ritz, around that time. He said that in the first Mr Mora alerted him to a "very important client" who would be coming in.

He said that shortly afterwards Mr Mora called again and spoke about Diana and Dodi, saying that they had seen a diamond ring in his window, gave him a size, and said it was needed by the beginning of September.

He said he told Mr Mora that this would be difficult because his workshop would be closed for the month of August.

"But then the same day I received a call from Dodi who told me that he needed this ring for the end of August because at the beginning of September their engagement would be announced. I told him that I would do everything necessary."