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Michael Faux, Burrell's bodyguard-turned-agent, informed the inquest at the High Court in London that the former royal butler told him he had an engagement ring which he was "led to believe" was Diana's.
"He said that he took it from the body in Paris," Faux was quoted by the Daily Mail of Britain as saying, under questioning from lawyer Nicholas Hilliard, acting for the coroner.
Faux told the inquest that Burrell kept the ring and other documents, including papers note-headed with the Buckingham Palace crest, at a neighbour's house, the report said.
According to Faux, he had been forced to remain silent until now because of a legal deal with his former boss.
The now US-based Burrell, who refuses to return to the witness box, rejects Faux's claims.
The inquest has earlier heard claims that Diana's lover, Dodi Al Fayed, bought the princess an engagement ring a few hours before their fatal car crash in Paris.
Harrods boss Mohamed Al Fayed has alleged that Diana and his son Dodi were killed by the British security service because the Princess was pregnant and they were planning to marry.
Source: DDNEWS