LONDON: Buckingham Palace was taken aback by Diana's surprise announcement Wednesday that she would agree to a divorce from Prince Charles. Diana said she and Charles had agreed to terms which would allow her to keep her title as "Princess of Wales" -- although she may no longer be "Her Royal Highness" -- and she would maintain a residence in London's Kensington Palace. The Princess apparently thought the deal was virtually done, but a spokesman for the crown said nothing, including any financial settlement, would be finalized for some time. Diana had declared that she did not want to end the marriage, but after she gave a very public airing of very private laundry in a December television interview, Queen Elizabeth turned up the pressure and called on the couple to divorce. TIME's London bureau chief Barry Hillenbrand reports that Diana seems very saddened by her decision. "She's holed up in Kensington Palace and canceled her appearance at this fantastic party, the 125th anniversary of the Red Cross. This indicates that she seems to be suffering from all of this. Meanwhile, Charles is soldiering on." Hillenbrand adds that the British seem more relieved than troubled. "In a way, the nation has absorbed the crisis, processed it, and has moved on."