Diana's private secretary between 1988 and 1996, Patrick Jephson, said: "When Panorama came out, part of my visceral reaction was outrage that somebody should have exploited the princess in this way. Knowing the princess as I did, making her perform like this was a combination of seduction and betrayal. Panorama burnt her bridges with the rest of the royal family and cut her off, fatally, from the protection of the royal institution."
Diana dropped huge bombshells in the interview, such as admitting her own infidelity as well as her husband's and questioning whether Prince Charles would even be suitable to be king.
"There were three of us in this marriage so it was a bit crowded," she said at the time.
As the broadcast turns 25 next month, Channel 4 asked whether journalist Martin Bashir ethically secured the interview or if she was duped into it.
Former BBC Director-General John Birt wrote that Bashir had "been introduced to a former member of the intelligence services who claimed Diana’s private apartments in Kensington Palace were bugged." Bashir met her through her brother, Earl Spencer, and produced two bank statements, which appeared to confirm that Spencer has been betrayed by a former senior employee. The statements showed payments worth $13,688 from two companies.
It was later claimed that the statements were forged and a freelance graphic artist created them a few weeks before the interview.
When Channel 4 approached BBC for a comment, they said Bashir was “seriously ill.”
After a new fire alarm was installed in her apartments, Diana thought she was being bugged. “Diana was afraid of being bumped off, simple as that," Diana's biographer, Andrew Morton, said.
Before Diana agreed to the interview, she reportedly told her lawyer that she had been informed that Queen Elizabeth II would abdicate in 1996, and that Prince Charles' now-wife, Camilla, would be “put aside” and that she would be murdered after he became king.
"The more outlandish the things she was being told, the more avidly she seemed to swallow them," Jephson said.
In an internal BBC investigation in 1996, it was found that the documents had "no bearing, direct or indirect, on the interview," and a 2007 Freedom of Investigation request received a response that there was no written record and everything was on a "need-to-know basis."
However, earlier this month, the BBC confirmed that there are records, and Bashir let Spencer see the files. Diana had allegedly written to the BBC to confirm that the documents "played no part in her decision" to be interviewed.
"BBC records from the period indicate Martin had explained to the BBC the documents had been shown to Earl Spencer and that they were not shown to the princess," the statement said. "The BBC’s internal records from the time indicate that Martin had met the Princess of Wales before the mocked-up documentation existed."
Before the Panorama interview, Prince Charles admitted that he had been faithful to his wife until their relationship "became irretrievably broken down." According to Jephson, his interview gave Diana “the high ground” but also set in motion the idea to retaliate in the "War of the Waleses."