Prince Rainier, 81,dies after long reign

Monaco's Prince Rainier III, who turned one of the world's smallest states from a faded gambling centre into a billionaires' haven in more than half a century on the throne, died aged 81 yesterday.

The palace said he had died after a battle with lung, heart and kidney problems.

Prince Rainier brought Hollywood glamour to Monaco by marrying the beautiful American actress Grace Kelly in 1956 and transformed the world's smallest state after the Vatican into a playground for the rich.

Princess Grace died in a car crash in 1982. He never remarried.

He will be succeeded as ruler of the tiny Mediterranean principality by 47-year-old Prince Albert, who took over his father's royal duties last week as hopes faded the monarch would recover.

A shy man, Prince Albert has lived in the shadow of his more glamorous parents and sisters Stephanie and Caroline while being groomed for power as Prince Rainier's only son. He has been linked to a succession of models and actresses but has never settled down.

"His Most Serene Highness Prince Rainier III died on Wednesday, April 6, 2005, at 6:35 in the morning (0435 GMT) at Monaco's Cardiothoracic Centre following broncho-pulmonary, cardiac and kidney disorders," the palace said in a statement.

Prince Rainier officially became monarch on April 11, 1950, but had already ruled Monaco for almost a year following the death of his grandfather.

He is expected to be buried next to his wife close to the palace after at least a week's mourning.

Flags were already at half-mast in Monaco in honour of Pope John Paul II. The mood in the principality was sombre.

"Everyone here feels orphaned," Patrick Leclercq, Monaco's Minister of State, said in a statement broadcast on French television.

Prince Rainier strengthened the sovereignty of Monaco. It won a United Nations seat in 1993.

The presidents of France and Germany praised his reign. "His Most Serene Highness Prince Rainier III was a unanimously respected personality, very much loved in the principality, and symbolised with strength the shared destiny of our two countries," France's Jacques Chirac wrote to Albert.

"His courage and his tenacity in the face of illness will remain an example for us."

But Prince Rainier - the world's second longest-serving monarch after King Bhumibol Adulyadej of Thailand - cut a lonely figure in later life as media focused on his children's problems and on charges that Monaco had become a mafia refuge for dirty money. His daughters have had a succession of disastrous, high-profile relationships.

For all Monaco's prosperity, Prince Rainier's reign appeared in some ways to support the myth of the curse supposed to have hung over the Grimaldi dynasty during its seven centuries of rule over Monaco.

Prince Rainier was heartbroken when Princess Grace died after the car she was driving skidded off a steep mountain road in 1982.

He never showed any sign of wanting to remarry. "I still feel her absence. It was a marriage of love," he said in 1999.

When Prince Rainier succeeded his grandfather Prince Louis II, Monaco was best known for the casino on which its prosperity was founded in the 19th century.

As Europe's last constitutional autocrat, he led Monaco into an age of skyscrapers, international banking and business.

By the 1990s, gambling accounted for less than five per cent of Monaco's annual income, the bulk of revenue coming from value added tax, tourism, commerce and industry.

Billionaires and millionaires poured in, drawn by the absence of income tax and the protection offered by the presence of policemen and security cameras on almost every street.

Critics say the property boom has turned the former coastal beauty spot, whose 30,000 inhabitants are squeezed into 200 hectares of land, into a "little Manhattan".