Prince Harry and Meghan Markle want to 'have their cake and eat it' - royal commentator

The Queen's handling of the controversy surrounding Prince Harry and Meghan Markle shows she is laying down the law for the family, says a royal commentator. 

The royal couple has been in the spotlight more than usual in the past few weeks, after they announced they would be stepping down from their royal duties and become self-sufficient.

Although their move has been agreed to by the family, royal commentator Richard Fitzwilliams says the Queen has made it very clear their exit will be done on her terms, not theirs.

"You can't be a half-in, half-out royal - that is what the Queen's laid down," Fitzwilliams told The AM Show on Monday. 

After the pair announced their desire to move away from the family and split their time between the UK and North America, Buckingham Palace released a statement saying the couple will no longer be able to call themselves 'His Royal Highness' or 'Her Royal Highness'. 

They will also have to pay back the money they were given to refurbish Frogmore Cottage, their home in the UK.

"Following many months of conversations and more recent discussions, I am pleased that together we have found a constructive and supportive way forward for my grandson and his family," the Queen said on Sunday (NZ time). 

"I recognise the challenges they have experienced as a result of intense scrutiny over the last two years and support their wish for a more independent life.

"It is my whole family's hope that today's agreement allows them to start building a happy and peaceful new life."

Fitzwilliams said the Queen made it very clear it was not possible to be a "part-time royal".

"The Queen, since 1952 when she ascended the throne, has behaved in a way which is absolutely impeccable. 

"She's taken a look in recent months, and particularly a couple of weeks ago, and seen the way Harry and Meghan have been behaving. 

"Quite frankly there's been more 'have your cake and eat it', rather than a matter of service to the institution and to the country."

The new agreement also means Harry will step back from his military appointments and will lose the titles he inherited from his grandfather Philip. 

"It's undoubtedly very disappointing," says Fitzwilliams.

He said the controversy comes at a less-than-ideal time for the royal family.

"There's no doubt with this and with the scandals surrounding Andrew and also that car-crash interview that was so unbelievably ghastly, it has been a very difficult couple of months."

Although many were speculating the controversy had tarnished the family's reputation, Fitzwilliams didn't think it would have a major effect in the long-term.

"Never forget that the royals can reinvent themselves with amazing aplomb."

Dr Sean Palmer, chair of Monarchy New Zealand, said the developments demonstrate the "continual evolution of the monarchy".

"It's been around for 1000 years, I think it will survive it," Dr Palmer told The AM Show.

"I think generally support for the institution and the individuals is incredibly strong."

Despite the Queen's positive statement, UK tabloids have reported that she was "privately unhappy" with the pair's plans to leave their duties.

Meghan's father Thomas Markle - who has a "complicated" relationship with his daughter - also revealed his thoughts on the developments, saying the young couple was "cheapening" the royal family.