Andrew Mountbatten-Windsor is set to keep the Freedom of the City of London honour after a review concluded it could not be removed.
It is one of the few remaining honours bestowed upon the disgraced former prince, who has been stripped of his royal titles due to his friendship with convicted paedophile Jeffrey Epstein.
Mr Mountbatten-Windsor received the honour in 2012 by “virtue of patrimony” due to his father Prince Philip being a Freeman.
The Freedom is typically awarded to individuals nominated by corporation councillors, and allows recipients to walk sheep over London Bridge.
The City of London Corporation, which bestows the honour, had considered the rules dictating “the circumstances in which, and procedure by which, it can be removed”.
However, a spokesperson for the authority confirmed to the Local Democracy Service that the historic honour cannot be taken back, after he inherited the status, which constitutes a legal right.
The corporation said: “Applications via patrimony are not considered by our elected members.
“We have carefully considered whether it is possible to remove a Freedom granted by patrimony and understand that we are not able to do so.”
The ancient but largely ceremonial honour is usually awarded to individuals for contributions to London or public life, with Sir Ian McKellen, Colin Firth and Dame Judi Dench among those to receive it.
Mr Mountbatten-Windsor was arrested in February on suspicion of misconduct in public office following allegations he shared sensitive information with Epstein during his time as trade envoy.
He spent around 11 hours in custody as searches were conducted at his home on the Sandringham Estate in Norfolk and at his former home, Royal Lodge in Windsor, Berkshire.
Ministers have agreed to release files related to his appointment to the trade envoy role, as the former prince was described as “a rude, arrogant and entitled man”.
However, MPs were told the government is unable to publish material that police need for their inquiries until officers are “satisfied”.
Prince William reportedly wanted his uncle to be axed from the line of royal succession in the autumn, alongside the stripping of his other titles.
The Prince of Wales is said to be frustrated that the process of his uncle’s removal from the line to the British throne, which the government is now weighing up, was not resolved at the time.
The former prince has always vehemently denied any wrongdoing.
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