An announcement might even have been scheduled for the day after the fatal car crash in Paris – but the inquest jury was warned that a photograph reported to show the princess pregnant with Mr Fayed's child should be discounted because it was taken before they met.

Lord Justice Scott Baker told the jury: "It will be necessary for you to consider carefully the evidence of an impending engagement announcement on Monday 1st September."

Mohammed al Fayed had said Dodi called him in the early evening of August 30 to tell him he had collected the engagement ring from Repossi, the jeweller.

The coroner said: "You will have to decide whether Dodi did indeed phone his father in those terms and whether, if he did, what he said was more than wishful thinking."

The inquest heard it had also been suggested Diana spoke to Mr al Fayed at that time and also spoke of making an announcement.

Lord Justice Scott Baker said the jury would also have to consider other evidence.

He said: "Rene Delorm was Dodi's butler. He says he was told by Dodi on 30th August 1997 to get champagne on ice ready for when he and Diana returned from dinner because he was going to propose to her and Dodi showed him a ring.

"He says that later in the evening he saw Diana sitting on the coffee table. Dodi was on one knee in front of her, caressing her tummy. She was looking at her hand. Delorm says he heard Diana say 'yes', but that was the only word that he heard. He cannot say whether it was 'Yes, I will marry you' or 'Yes, we can go to the Ritz'."

Mr Delorm found the ring in Dodi's apartment after the fatal crash, the jury heard.

But there was also a "considerable" body of evidence to suggest an engagement was not imminent, the inquest heard.

Lord Justice Scott Baker told the jury Diana had a number of conversations with friends in the days before her death, in which she made no mention of an engagement.

When one, Lady Annabel Goldsmith spoke about the subject of marriage, Diana replied: "Annabel, I need marriage like a rash on the face."

Lord Justice Baker added: "There are other witnesses whose evidence is that if Diana was going to get engaged, they would have been likely to know about it." The relationship between Diana and Mr Fayed had blossomed over the summer of 1997. The Princess and her sons had been on holiday in St Tropez in the south of France, at the invitation of Mohamed al Fayed, when Dodi arrived to join the group on the evening of July 14. It was on that day that Diana had told the press: "You are going to get a big surprise, you will see, you are going to get a big surprise with the next thing I do."

The coroner told the court that much had been made of the remark in the subsequent years, but added: "Perhaps we shall never know what Diana had in mind but you will note, members of the jury, that the remark was made before Dodi even joined the party at St Tropez."

Holding up a copy of a photograph which the jury has been given, he continued: "Similarly there is a famous photograph of Diana in a leopard-print swimsuit that seems, some observers have suggested, to show that Diana was pregnant."

He said the question of whether Diana was pregnant was one he would return to but added that the photograph was taken before the couple's relationship was believed to have begun.

He told how Diana and Dodi had subsequently spent the weekend of July 26 together in Paris, attracting little attention.

Within days they were together again, holidaying on board al Fayed's yacht, the Jonikal, in the Mediterranean, the jury heard.

The coroner held up a copy of another picture, taken during that holiday, showing Diana and Dodi kissing.

He said: "There is evidence the appearance of this photograph in the international media some days later, and rumours about the sum paid for it, fuelled media interest."