The inquest has been delayed by a lengthy police investigation and legalities.

Princess Diana was killed in a car crash in Paris in 1997.

British law insists an inquest must happen when a body is returned to Britain following a death abroad.

Some suggested Diana's death was a conspiracy

The breakthrough follows the appointment of a new coroner for the Royal Household, Michael Burgess.

He would head Diana's inquest and that of Dodi Fayed, who was also killed in the Paris crash.

A source close to the case told the Press Association: "It will obviously take Mr Burgess time to familiarise himself with such a complicated case, which means an inquest this year is out of the question.

"But it does mean an inquest at some point next year is a real possibility."

'Ludicrous' law

The aim of an inquest is to identify the causes of a person's death.

The hearing would allow the events leading up to the crash to be explored in detail.

It would be the first inquest into a fatal accident involving a member of the Royal Family to be held since 1972, when Prince William of Gloucester was killed in an air crash.

Al Fayed welcomes progress

Dodi's father, Harrods owner Mohamed Al Fayed, at the time suggested Diana's death was a conspiracy.

On hearing the latest developments, he said: "Mr Al Fayed has always wanted the full circumstances of the crash to be put before a jury in a situation where witnesses can be called and the accident examined.

"Mr Burgess seems to be taking things forward, which is very much to be welcomed."

Speaking from his home in Middlesex on Sunday, Mr Burgess said he was unable to comment on the case.

Mr Burgess replaced Dr John Burton as coroner for the Royal Household.

Dr Burton last year said he considered the law compelling an inquest to be "ludicrous".