The secret feud between the two princesses was laid bare on Sunday, revealing a relationship riven with hatred, bitterness and fierce rivalry.
According to the Daily Express, during the Panorama interview, Diana had made the candid admission: "There were three of us in this marriage, so it was a bit crowded"
Her comment made a reference to Prince Charles's relationship with Camilla Parker Bowles.
From that day on, according to reports, Diana's relationship with Margaret soured to such an extent that the latter could not bear to even look at images of the Princess of Wales.
Margaret turned against Diana so emphatically that she would flip over the cover of any magazine in her home that featured the latter on the front, it was claimed on Sunday.
According to reports, there was no thaw between the two women even in death with the full extent of the schism demonstrated on the day of Diana's funeral.
Margaret even appeared "flint-eyed" when Diana's flower-bedecked coffin passed the Royal Family, and remained upright and upstanding, "looking as if she would rather be somewhere else".
The astonishing claims were made by the Princess of Wales's highly-respected biographer Andrew Morton.
The revelations come after a new official biography of the Queen Mother controversially claimed that Princess Margaret deliberately burnt letters between Diana and her mother.
Morton said that destruction of 'intimate and private' letters should come as 'little surprise' as "genuine distance"existed between Diana and the Royal Family.