Princess Diana looks over Prince George in new photos of Kate and William’s living room

A TOUCHING photo of the princes with their mother Princess Diana can be seen in the Duke and Duchess of Cambridge’s living room for the first time.

Never before seen pictures of Prince William and Kate’s newly decorated living room at Kensington Palace reveal the personal touches the couple have placed around their London home as they and Prince Harry entertained US President Barack Obama and his wife, Michelle on Friday.

Perched on a side table in between two windows, a series of four photos can be seen, including an iconic portrait of the late Princess Diana taken in the flower garden at Highgrove with her eldest son’s arms around her neck as he laughs happily into the camera.

Prince Harry is seen sitting next to her with his arm on her lap as she wraps a loving arm around him in the photo taken on Prince Charles' 40th birthday in 1988, nine years before her tragic death.

The photo shows Prince Williams’ loving mother will never be forgotten but is also a sad reminder little Prince George will never meet his grandmother.

A photo of a young Prince William in his teenage years is also on the table as well as two other photos, including one of Kate’s parents, Carole and Michael Middleton on the Duke and Duchess of Cambridge’s wedding day.

The newly released photos of the couple entertaining the leader of the free world and the First Lady has given the world a chance to take a glimpse into the large living room which was redecorated using £4.5million of taxpayers’ money, although the Royals paid for fixtures and furnishing themselves.

Tastefully decorated, the room reflects the couple’s image of being smart but down to earth.

The hand-made rocking horse the Obamas gave to Prince George when he was born appears to be a hit with the young prince as he enjoyed a play on it by the living room window as he stayed up late to meet the President and his wife in his pyjamas and smart monogrammed dressing gown and slippers.

And the lucky two year old was given another present by the Americans, a soft toy replica of the President’s famous Portuguese Water  Dog, Bo.

An adorable photo captured the moment the little prince shook hands with President Obama who knelt down to talk to him.