Sarah Ferguson once shocked the Palace when she refused a multimillion-dollar gift from Queen Elizabeth II.

The late Queen gifted her granddaughters, Princess Beatrice and Princess Eugenie, a $3 million seven-bedroom Georgian mansion in Surrey, one year after Fergie’s divorce from Andrew Mountbatten-Windsor.

The Grade II-listed property, named Birch Hall, was purchased by the Queen in 1997 to provide her granddaughters, who were then aged nine and seven, with stability amid the “chaos” of their parents’ separation.

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The lavish property included five acres of land, an outdoor heated swimming pool and a tennis court.

However, Fergie, 66, turned down the Queen’s gesture, and the property stayed empty until it was sold in 1999.

“The Queen saw Birch Hall as far more than an extravagant present for a young granddaughter,” an insider told Radar Online.

“In her mind, it was a way of creating a stable family base for Sarah, Beatrice, and Eugenie after the upheaval and embarrassment surrounding the Yorks’ divorce…

“It was meant to be a gesture of reassurance as much as generosity – almost a statement that, despite the marriage breaking down, Sarah and the girls would still be looked after and remain firmly part of the wider royal fold.”

Fergie reportedly refused to move into the mansion as she feared she would not be able to keep up with the cost of maintaining it.

“Sarah quickly realised that accepting a grand Georgian estate and actually being able to sustain it were two completely different things,” the insider claimed.

“Behind closed doors, she was said to be genuinely anxious about taking on a house that could end up draining her financially and becoming a constant source of stress rather than stability.”

Instead, Fergie, Beatrice and Eugenie continued to live together at Sunninghill Park until 2006.

Two years later, the then-Duchess of York re-joined her ex-husband at Royal Lodge in Windsor.

Birch Hall, which is now thought to be worth around $8.5 million, was put on the market in 1999 with estate agents citing a “change of circumstances”.

Money from the sale was placed in a trust for Beatrice and Eugenie, according to The Sun.

Andrew, 66, and Fergie were kicked out of Royal Lodge late last year over their ties to Jeffrey Epstein.

The ex-prince now lives in Marsh Farm on the Sandringham Estate, whereas Fergie has gone into hiding following revelations in the Epstein files.

At the time of writing, the author was last spotted staying at a luxury wellness resort in the Austrian Alps.