Warren said:Keeping in mind that this is all speculative and unconfirmed, one of the Sydney papers stated that Charles would not agree to the London flat proposal because it would be "a security nightmare", so Clarence House will become their residence. It was claimed that the arrangement had "the blessing of The Queen and the Duke of Edinburgh...both are said to adore her for her soothing effect on William."
Again we simply don't know yet if this is the case. I would imagine the Queen would have to consult with the Prime Minister to ensure there won't be a problem with Parliament if a non-royal is living in a royal palace rent-free and benefitting from security arrangements in place for Prince William.
Given recent inquiries and demands from MP's to question the Prince of Wales' finances in the Duchy of Cornwall, it may turn out to be a controversial matter if true.