A spokesman for Harry said it was disappointing the offer from the King had been "withdrawn at the last moment", with the looming judgment in the duke's case against Associated Newspaper on Tuesday given as the reason.
As exasperation appeared to grow on both sides, it is understood the duke initially turned down the offer for himself and his family, who are no longer accompanying him to London, on Saturday before making a U-turn later in the day and asking to stay himself.
The appropriate hospitality and staffing provision was said to be no longer available, with Buckingham Palace also believing the longstanding legal case had complicated the matter, and could compromise the King's constitutional position.
It is said that while every effort was made to facilitate Harry's stay, as a courtesy to staff and others involved, the royal household required a minimum level of notice to ensure he could be hosted appropriately at a royal residence.
Harry and a group of other household names are set to find out on Tuesday whether they have won their High Court cases against the Daily Mail's publisher.
The decision by the palace was said to have been taken in consultation with the King, with outcome communicated to Harry through the appropriate channels.
Accommodation at a royal residence will be made available to Harry and his family for future visits, it is understood.
At the weekend, it was announced Meghan, Prince Archie and Princess Lilibet would no longer be joining Harry in London amid concern over their security.
No decision has been made as to whether the family will join the duke for other parts of the UK visit outside of the capital, with reports he wanted to take them to see the final resting place of his mother Diana, Princess of Wales, at Althorp in Northamptonshire.
Harry had also been hoping to reunite his children with their grandfather the King, who is still undergoing treatment for cancer, for the first time in four years, but it is not clear whether this will go ahead.
It is also not yet known when or whether Harry will see his father during his trip.
The King has a busy run of engagements, while Harry is carrying out five days of appearances in London and Birmingham, including marking the one-year countdown to the 2027 Invictus Games.
Harry had been waiting for a review by the Risk Management Board on his security requirements, but found out on Friday this had yet to take place.
The Sussex family were not eligible to receive taxpayer-funded protection while in the UK, other than when they were within royal residences.
The duke criticised his father Charles, stepmother the Queen, brother the Prince of Wales and sister-in-law the Princess of Wales in his Oprah interview, Netflix documentary, interviews and his autobiography Spare, after stepping down from the working monarchy six years ago.
During an 11-week trial earlier in 2026, the High Court in London heard claims, brought by Harry and others including Baroness Doreen Lawrence, Elton John and his husband David Furnish, against Associated Newspapers Limited (ANL) of unlawful information-gathering.
These include allegations of voicemail interception, landline tapping and obtaining information by deception carried out by private investigators, freelance journalists and ANL staff.
ANL strongly denies the claims, saying it "has established a complete defence to all parts of the claims on the merits" and that the cases had been brought too late.
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