CHARLES, DIANA SET FOR LENGTHY DIVORCE\Legal, nobility issues remain to be ironed out for royal pair.

Byline: Sarah Lyall The New York Times

A day after Diana, the Princess of Wales, said she had reluctantly agreed to divorce her estranged husband, Prince Charles, it became increasingly clear that her ringing threat last year to "not go quietly" had been deadly serious.

With the drama of the divorce announcement still dominating discussions in the news and on the streets of London, Charles and Diana both dug in for what is likely to be a bitter campaign, fought as much in public as in the offices of their high-price lawyers.

On Thursday evening, Diana canceled a public appearance at the 125th anniversary celebration of the British Red Cross, saying through her spokesman that she was "very upset and decidedly sad" at the decision to end her disastrous 15-year marriage.

"The princess would prefer a few days of quiet before she picks up her public engagements again," the spokeswoman, Jane Atkinson, said. "Any woman would."

While his 34-year-old estranged wife stayed at home in her apartment in Kensington Palace, presenting herself as the aggrieved and grieving party, Prince Charles, the 47-year-old heir to the British throne, spent the day in an old brown coat and a pair of rubber boots, touring the cleanup operation from the oil spill off the Welsh coast last week. He had nothing to say about the divorce.

Indeed, Buckingham Palace was taken aback Wednesday by Diana's abrupt decision to make an announcement on her own. The announcement came hours after Prime Minister John Major unveiled an important Irish peace initiative and appeared intended to put Charles and his mother, Queen Elizabeth, at the greatest possible disadvantage. And Thursday, they were scrambling to gain the upper hand in a negotiation on the divorce terms conducted in public view.

But it seemed clear that Charles's camp, which Diana has called "the enemy," was willing to confront her head-on in her own public relations campaign. If the princess's announcement seemed intended, as some commentators suggested, to embarrass the palace into giving her the concessions she wants from a divorce settlement, then the palace wasn't playing along.

The only thing that was certain, a palace spokesman said Thursday, was that a divorce would take place. Nothing else - not the princess's future home, nor her future title, not her eventual financial package - had been resolved. These issues would be considered "carefully and constructively in the context of the overall divorce settlement," the palace said.

"There are now a number of issues to be further discussed and settled," the spokesman said. "Some of these are matters for the lawyers, who are now in touch with each other, and some are matters to be decided between the Prince and Princess of Wales, consulting the government as necessary."

In a pointed reference to the princess's decision to disclose her divorce plans to the press prematurely, the palace made a probably futile plea for future discretion. "It is the queen's hope that these discussions can be conducted both privately and amicably," the spokesman said.

Meanwhile, Atkinson denied that there had been misunderstandings of any kind. The prince and the princess agreed to certain conditions at a meeting Wednesday afternoon, she said, and Diana had simply decided to make those conditions public.

"We are hoping that the current situation can be cleared up very quickly and that negotiations can then continue in private," she said.

Once the issues of what Diana will be called, where she will live, and how she will fit in the royal family are resolved, the biggest outstanding question will be what sort of financial settlement she can hope for.

Diana is without question an expensive woman. Recently, an account of a year's worth of expenses was leaked to reporters, apparently by appalled supporters of Prince Charles, who has to pay her bills.

Her annual expenditures included more than $150,000 for clothes; $12,000 on alternative therapies like colonic irrigation and aromatherapy; $33,000 on other beauty treatments; and $15,000 on hair (cutting, washing, styling, and coloring). And that didn't even include basic expenses like food, heating, and transportation.

Confusion remained over what Diana would be called when the divorce came through.

On Wednesday, she said she would remain "Diana, Princess of Wales." But on Thursday, Buckingham Palace, while refusing to concede that point, did make it clear that Diana had renounced her right to be called "Her Royal Highness."

But it said that it had been her idea - not, as Diana's supporters maintain, a plan forced on her by her in-laws.

"The decision to drop the style 'Her Royal Highness' is the princess's own," a spokesman for the palace said. "It is wrong to suggest that either the queen or the Prince of Wales pressured her to do so."

Through her spokesman, Diana begged to differ.

"We have agreed to differ with the palace over whether the princess decided to drop the style 'Her Royal Highness,' " Atkinson said. "The princess spoke to the queen, and it was made clear that 'HRH' would not be appropriate after a divorce."

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Photo News of Di's divorce announcement the day before dominated the British media Thursday, even eclipsing news about the Irish peace talks. Associated Press