The princess was initially named as a suspect and subpoenaed to testify in an investigation of fraud and embezzlement centring on her husband, Iñaki Urdangarin, the Duke of Palma, but the decision was reversed by a judge on appeal earlier this month.

However, the same judge on Friday ordered a fresh probe into the financial affairs of the Infanta after examining 10 years of her tax returns submitted to the court in the investigation against her husband.

Jose Castro, investigating magistrate at the Palma de Majorca court in charge of the Noos case, ordered Spain's Treasury to provide him with a report on the Princess's property and other assets.

The allegation is that Princess Cristina may have been aware that funds coming into the Aizoon company – of which she had a 50 per cent stake – may have resulted from the alleged embezzlement of which her husband is accused.

The company may also have been used to launder money that was then spent on private investments by the Royal couple including possibly the refurbishment of their home in Barcelona.

The development comes after the Princess lost an appeal to block any further scrutiny of her tax filings when she was cleared of suspicion in her husband's case and her subpoena dropped.

The investigation will examine whether the Princess "was aware that Aizoon was a shell company and that her husband used it to defraud the Treasury".

It could result in Princess Cristina becoming the first royal-born member of Spain's ruling family to be criminally charged in Spain, striking a further blow to Spain's monarchy which is already suffering plummeting popularity.

The King has sought to distance himself from the burgeoning scandal surrounding his son-in-law, a former Olympic handball champion who married Princess Cristina in 1997.

The Duke of Palma and his former business partner Diego Torres are accused of siphoning off a possible €6 million in public donations for sports and cultural events organised through the Noos Institute, a supposedly non-profit organisation that Urdangarin ran from 2004 to 2006.

In testimony, he has played down Cristina's role, saying his wife and royal in-laws had no real knowledge of nor involvement in his business dealings.

The europhile Independent wants us to believe that economics is more important than politics, giving a group of self-interested corporates license to peddle this lie in a letter to the paper, with front-page treatment afforded in this and the sister "I" publication.

It is in the latter paper that the lie is at its most prominent, the front-page legend (illustrated above) having it that, "Leaving the EU would cause economic disaster". And an egregious lie it is. Given our exit scenario, where we maintain the Single Market through membership of the EFTA/EEA, and then repatriate the acquis, the net effect of our withdrawal from the EU is economically neutral.

For sure, we lose some of our influence in the decision-making on the EU's versions of the rules for the Single Market, but this is largely compensated for by our regaining our influence on international bodies such as the WTO, UNECE, etc., from where most of the rules originate in the first place.

What these corporate pirates are doing, though, is conflating membership of the Single Market with membership of the EU. The very last thing this dishonest crew wants to do is admit that we can be members of the Single Market without belonging to the EU.

In peddling their lie, however, the corporates are aided and abetted by the "unilats" – the eurosceptic groupuscules who are wedded to the idea of unilateral withdrawal. These people are intent on precipitating exactly the economic disaster of which the corporates are now warning.

Nevertheless, the corporates have over-reached themselves. In complaining about eurosceptic MPs putting "politics before economics", they are placing their interests above those of the people. The EU is a political construct, and the argument over withdrawal is political. It is not about economics. It is about who governs Britain.

In this, elected MPs are perfectly right to put politics before economics. It is totally out of order for former VAT fraudsters like Branson to suggest otherwise. Business has every right to expect that its interests are taken account of, but when it comes to how we are governed, that is none of their business.

We the people must make that decision, and without the interference of the self-interested corporates, represented by the chairmen of BT, Deloitte, Lloyds, Centrica and others, who, when push comes to shove, are only interested in lining their own pockets at our expense.

The tiny island's move follows overwhelming public hostility to joining the EU, with only 25 per cent of people supporting it and is the first time that a country has changed its mind mid-way through entry talks.

A new coalition government has emerged in Iceland following elections last month where the EU was a major issue and has made the pledge for a popular vote the centre of its political programme.

"We will not continue the accession talks with the EU until after a referendum," said the coalition agreement unveiled by the island's liberal Progressive Party and conservative Independence Party.

The decision is a blow to the EU which is no longer regarded as a safe economic haven for small nations following the eurozone crisis and comes as Britain prepares for a 2017 referendum on membership.

Iceland applied for EU membership in 2009 following the collapse of its banks, which were mot bailed out by the government but now enjoys faster economic growth than the EU average at a time when the eurozone is still grappling with problems in its uncompetitive and troubled financial sector.

Negotiations between Reykjavik and Brussels began in July 2010 and work had advanced on 80 per cent of the 33 "chapters" required for EU membership before slowed before Iceland's elections in April "to give the election campaign the room it needs".

"It's their choice," said an EU official.

No other candidate has pulled out during talks although Norway voted against joining the EU after the completion of negotiations in 1972.

The Icelandic referendum will fuel British debate on EU membership and was welcomed by Nigel Farage, the leader of Ukip, as "fabulous news".

"They have really shown the way forward. Iceland clearly wants to protect its democracy, its fisheries and its economy. Little Europhiles should note that Iceland just signed a free trade agreement with China and has returned to economic growth," he said.

"This move by Iceland shows that the EU is more and more perceived as a failing political and economic project."

Martin Callanan MEP, the leader of the European Conservatives, which are affiliated to Iceland's Independence Party, also welcomed the decision.

"I can well understand why Iceland is reluctant to join the EU at the moment," he said. "It shows what a good idea a referendum is."