The late Queen was cross enough the first time she had to move in to Buckingham Palace. ‘People here need bicycles,’ she complained as a ten-year-old princess when her father became King and uprooted his family from their happy home at 145 Piccadilly.

The second time around, in her mid-20s, she was in tears. By then, she was a new young monarch and blissfully happy living in the marital home which she and Prince Philip had refurbished for their growing family: Clarence House.

Even so, she was constitutionally obliged to pack up everything and move down the road to Buckingham Palace. Why? Because the prime minister said so.

Winston Churchill was firmly of the view that monarchs should ‘live above the shop’ – as they had done since the accession of Queen Victoria in 1837. And that was that.

As of yesterday, this enduring tradition has come to an end. Tucked away among the various statements and accounts as the Palace unveiled the monarchy’s annual report for the latest financial year was a proper jaw-dropper:

‘The King and Queen have decided not to adopt Buckingham Palace as a personal residence and will instead continue to use Clarence House as their London home.’

Yikes. It is no exaggeration to say that this is, to date, the most significant pro-active decision of the King’s reign.

Certainly, traditionalists will be alarmed. If it is not quite up there with the ravens leaving the Tower of London, it unquestionably shows that the old royal watchwords of ‘continuity’ and ‘tradition’ are now more flexible than they once were. Moreover, the Prince of Wales has made it very clear that he has no intention of moving in to the Palace when his term comes, either.

He might like to talk of his plans to ‘change’ things. Well, he is certainly not the only one.

Critics of the monarchy may also ask why the Government has spent nearly £370 million on upgrading the pre-eminent royal residence if no one is going to reside in it.

So what does it mean for the monarchy? Not much – and a great deal.

The King and hundreds of staff will continue to work there as before.

The Palace remains the central apparatus of the head of state – a place for entertaining world leaders, hosting tens of thousands of subjects to investitures or garden parties, and welcoming hundreds of thousands of paying visitors whose ticket purchases maintain the Royal Collection, the world’s greatest accumulation of treasures.

The Royal Standard will fly even when the King is asleep over the road because Clarence House is deemed to be part of the extended Buckingham Palace perimeter.

Come those punctuation marks in British history – coronations, royal weddings, jubilees, moments of national salvation and so on – the public will still flock to those gates. The Royal Family will still step through the same net curtain on to the same balcony.

However, they will not be living there. And for an institution rooted in human connection, that matters.

It has often been said that what differentiates say, France’s Palace of Versailles from a British royal residence is that the former is a museum and the latter is a home. When I was writing Charles III, my biography of the King, one of his senior officials told me that he might not have shown much passion for Windsor as a prince, but would now spend nights there as monarch: ‘The King often talks about the need for a living tradition. Windsor is not Versailles. It needs to be lived in and the living tradition informs everything.’ Henceforth, however, it does not seem to inform Buckingham Palace.

Nonetheless, it seems to me a wise move. First, it opens up the Palace to a much greater variety of uses if it is no longer ‘domestic’ and entirely ‘corporate.’ Critics love to bang on about greater public access. Well, now they will get it.

Second, no royal generation has ever felt entirely at home there. Long before Victoria made it royal HQ, George III bought ‘Buckingham House’ as private quarters for Queen Charlotte and their ever-expanding brood.

It was the eldest, George IV, who spent ruinous amounts on converting it into a three-sided Palace. He never lived to see it finished and his successor, William IV, refused to leave his home at Clarence House (sound familiar?).

Victoria added the fourth wing (what we would call ‘the front’) and took up residence but always preferred Windsor, Osborne on the Isle of Wight and Balmoral.

Her successors have all felt the same. The only person who really loved it was the late Queen Mother. She even offered to stay put after the death of George VI so that Lilibet could remain at Clarence House – but Churchill was having none of it.

What would the late Queen have said about the news? Actually, I think she would have gone along with it.

She was, above all else, a pragmatist and would accept that if the stated aim is greater public access, then fewer bedrooms make sense.

By the end of her life, she had moved out to Windsor anyway. Aides cited building work as the reason, though everyone knew the score.

Yesterday, the Palace also confirmed secret plans, first revealed in my book, to build a new library at the Palace. The last one was sold off by George IV and became the British Library.

Now, Queen Camilla is to turn Prince Philip’s old rooms into a new ‘Consorts’ Library’, in keeping with her love of literature and literacy.

It will include all her own books and those of previous consorts including Prince Albert and Prince Philip.

The latter had a fabulous collection of 15,000 works, spanning history, wildlife, philosophy, engineering, cookery and poetry (I even spotted the collected works of Bob Dylan in there).

The Queen loves fiction. In other words, the Palace may soon take on an added educational function.

The news also reflects the changing nature of the royal/prime ministerial dynamic. While Churchill felt entirely within his rights to boss the Sovereign around over her living arrangements, it would be unthinkable for a 21st-century prime minster to dictate the location of the regal toothbrush.

A Palace spokesman offers a poetic explanation that the Palace will ‘remain the beating heart of the monarchy, just not its resting head’.

It is still the end of an era.

However, King Charles III is merely echoing the late Queen’s careful adherence to the old dictum from Lampedusa’s The Leopard: ‘If things are going to stay the same, things are going to have to change.’