Princess Beatrice and Princess Eugenie have reportedly been banished from a key royal event, with other members of the extended family instructed not to be photographed with the sisters.

The duo, the daughters of the embattled Andrew Mountbatten-Windsor and Sarah Ferguson, have reportedly been told they can’t join the royal family at Royal Ascot in June.

It comes as part of a wider move to ice the sisters out of the royal fold amid the fallout from their parents’ relationship with convicted paedophile Jeffrey Epstein.

Royal Ascot is a traditional event for the extended family, in a tradition dating back to 1711. The Mail on Sunday reports that the instruction to Beatrice, 37, and Eugenie, 35, to steer clear of one of their favourite events had “completely blindsided” them. But the change is said to be “part of a wider decision to exclude the princesses from all public-facing events for the foreseeable future”.

“I’ve spoken to my friend who works at Ascot and they said the girls have been told they can’t be there this year,” a source told the Mail.

“Beatrice has taken it the hardest. She’s been completely blindsided by all of this.”

Princess Beatrice (left) and Princess Eugenie arrive at Royal Ascot in a carriage in 2011. Photo: AAP

Depending on reports, the instructions either come direct from Buckingham Palace or from the princesses’ cousin, Prince William.

He has also reportedly advised other royals to avoid appearing in photographs with the York sisters “for the rest of the year”.

The Prince and Princess of Wales are apparently keen to keep Beatrice and Eugenie at “arm’s length” amidst the ongoing fallout from the Epstein files.

“William, it is reported, may well take a hard line when he becomes king. It depends on how affected the royal family is by what happens subsequently,” royal expert Richard Fitzwilliams said.

“There is currently the strong possibility of the cases which the police are assessing going forward and Andrew Mountbatten-Windsor being arrested and very possibly put on trial.

“If this happens, it may be impossible for the royal family to move forward with any members of the York family attached to it. William and Kate [Middleton] do not appear to have close ties with the sisters and would probably not miss them.”

It follows the arrest of Mountbatten-Windsor last month, and searches of his former home, Royal Lodge at Windsor. He spent 11 hours in custody on his 66th birthday amid allegations he shared sensitive information with Epstein during his time as the UK’s trade envoy.

The police investigation continues.

Mountbatten-Windsor has denied any wrongdoing over his links to convicted sex offender Epstein, but has not directly responded to the latest allegations.

The former prince was stripped of all of his royal titles late last year amid the fallout from the Epstein files.

This week, the BBC reported he had been asked to terminate the lease on another Crown Estate property early.

Mountbatten-Windsor had kept the tenancy of East Lodge, a Grade II-listed cottage about eight kilometres from Windsor, when he gave up Royal Lodge several weeks ago.

The 19th-century, single-storey, thatched cottage was believed to have been used for staff accommodation. It is near the much bigger Sunninghill Park, which was the former prince’s home until he moved to Royal Lodge in 2004.

The Epstein documents also include extensive emails between him, his now-jailed associate Ghislaine Maxelle and the prince’s ex-wife, Ferguson – the former duchess of York. While she is not accused of any illegal actions, Ferguson’s association with Epstein continues to raise questions.

Beatrice and Eugenie were named repeatedly in the US Department of Justice documents. They are included in emails suggesting they join Ferguson on a visit to Epstein’s home shortly after his release from prison in 2009 after serving a term for child sex offences.

They would have been aged 20 and 19 at the time.

There is also another exchange suggesting Epstein pay about $A14,000 ($A20,000) for the mother and daughters’ flights. In yet more emails from Epstein to “Ferg”, he apparently asks about a tour of Buckingham Palace.

“Sarah, could you are [sic] one of your daughters show [redacted] buckingham thanks,” the email sent on March 7, 2010, says.

Mountbatten-Windsor remains eighth in line to the British throne, with Beatrice ninth behind him, followed by her two daughters. Eugenie is then 12th, followed by her two sons.

While their father faces being removed from the royal succession, the sisters have so far retained their titles.

Eugenie and Beatrice at a Buckingham Palace garden party with the late queen and Prince Harry.

They have no official royal duties and are mostly seen publicly at events such as Ascot and garden parties. They also often attend more family-oriented events such as church services – although neither was at last year’s Christmas Day service at Sandringham.

Fitzwilliam predicts they are likely to “disappear from royal life” because of the scandal.

“Beatrice and Eugenie will disappear from royal life. They will probably lose their coveted charitable organisations,” he told Britain’s Daily Express.

“They are unlikely to be prominent in the future and would be better off quiet.”

Eugenie is a co-founder of the Anti-Slavery Collective, whose focus includes victims of sex trafficking. Beatrice is patron of British charity Borne, which is dedicated to premature birth.

The sisters are also involved with other charities, such as Outward Bound and the Salvation Army.