They fear the rift between the royal brothers is so deep it threatens to cast a shadow over the future reigns of William and their father Charles.
Charles, 71, still has a warm relationship with Harry but appears unable to end his sons’ feud – a failure insiders feel will reflect badly on him.
There are similar fears the estrangement will overshadow William’s reign and some have even suggested it could be as damaging for the monarchy as the 1936 abdication crisis.
Ambition Tensions came to a head when Harry, 36, started dating future wife Meghan Markle, and William suggested he was moving too fast.
Friends have told the Daily Express Harry’s disillusionment actually began when he was still in the Army.
They say his relationship with Meghan and the dispute with William, 38, were the final triggers for him to realise his long-held ambition to break free from royal responsibilities.
The Queen, Charles and advisers will review the agreement with the Sussexes in March after their first year of independence. They have left the door ajar for them to return but that looks increasingly unlikely.
The couple bought an £11million home near Santa Barbara, California, and agreed a multi-million pound deal to make documentaries for Netflix.
Some officials have suggested the Sussexes should be stripped of their remaining royal patronages after they “crossed a line” last month by intervening in the US election.
Their efforts to encourage voters to register and reject hate were seen as thinly veiled support for the Democrats’ candidate Joe Biden.
It is understood the Sussexes’ role as president and vice president of the Queen’s Commonwealth Trust may be in question and Harry is unlikely to be given back military patronages.
But although every controversy risks reflecting badly on the monarchy, officials have little sway.
The couple have achieved financial independence and insist they have repaid the money Charles gave them to get through their first year outside “the Firm”.