Strange Tale of the Princess and the Printer : Royalty: Diana of Wales reportedly has been a vacation guest of Michael Flannery of Sylmar.

Let’s say your name is Michael Flannery, you own a big printing plant in Sylmar, and the British newspapers report that you’re a new chum and vacation host of Princess Diana.

Now let’s say you’re Michael Flannery’s family, and you claim not to have the slightest idea what the British press is talking about.

That’s the strange situation unfolding this week in a twisted fairy tale that might be called “The Princess and the Printer.”

British newspapers reported six months ago that the estranged wife of the Prince of Wales had stayed at the luxurious Vail, Colo., home of multimillionaire Sylmar printer Michael Flannery during her New Year’s skiing holiday.

The Sunday Times of London, in a Jan. 1 story expressing its amusement over Americans’ fascination over whether the 34-year-old Princess of Wales had an American boyfriend, included Flannery, a divorced 56-year-old, in what the newspaper described as a short list of suspected beaus that included New York financier Theodore Forstmann. Flannery was described as “millionaire No. 2,” (to Forstmann’s No. 1) and “the perfect mystery man.”

The newspaper reported that a maid had confirmed that Princess Diana stayed at Flannery’s $4.1-million home on chic Forest Road in Vail, and her personal ski instructor was reported to have been seen driving into his estate.

Then British press interest in Flannery and his house flared anew over the past week when the Princess returned to Colorado for a summer vacation with her two sons, princes Harry and William.

By Friday, Fleet Street reporters were camped out at the house, which is close to homes owned by billionaire Ross Perot and leveraged-buyout king Henry Kravitz.

Flannery isn’t talking. He would not return a reporter’s calls. Flannery’s son denied that his father even owns a home in Vail. Flannery’s father declined to answer questions.

But a lawyer who represented Flannery in a lawsuit against a Vail realtor confirmed that the Sylmar printer owns the home in which Princess Diana is thought to be staying. And two friends of Flannery, who asked not to be identified, confirm that it is well-known in his circle that he has hosted the Princess at his home.

“Sure, sure, everyone knows that,” said one. “But it’s not boyfriend stuff. She’s basically just borrowing the house.”

He noted that Flannery, divorced about two years ago, has a girlfriend.

So who is this elusive hotelier to royalty?

Three friends and business associates described Michael Flannery with the same words: “Very smart and very charming.”

He is a San Fernando Valley press lord--of sorts. He owns Valley Business Printers, an elegantly landscaped, 48,000-square-foot plant on a side street in Sylmar, a few doors down from Los Angeles County Juvenile Hall. The firm prints small newspapers and the LA Weekly, as well as commercial advertising inserts.

Friends say he started the business from scratch a couple of years after serving in the U.S. Army even though his father, also named Michael Flannery, was once publisher of a string of San Fernando Valley weeklies, including the San Fernando Sun. Recently, Flannery also started another firm, American Graphics, which manufactures printing presses.

An associate, who declined to be named, called the firms “well-run and very profitable.”

Four years ago, those businesses generated enough money to enable the Malibu resident to buy a storybook home at the foot of the slopes in Vail, which he called Chateau de Foret.

According to another associate who declined to be named, a friend of Princess Diana saw a photograph of the home in the local Vail paper when it was featured in a story about the real-estate lawsuit. The friend is said to have received Diana’s permission to ask Flannery for the keys to the castle for the New Year’s weekend, and he is said to have given the nod.

It is not known if she paid rent for it. One source suggested that she probably did not.

“There’s a certain ethos with British royalty,” he said, “where they think it’s a favor to you for them to stay there. It’s a ‘George Washington Slept Here’ kind of thing. ‘Lucky you--I’ll stay in your house.’ ”

Regardless, they appear to have become fast acquaintances.

The owner of a Vail restaurant, the Uptown Grill, said Flannery and the Princess and four other people dined at her establishment one night during her New Year’s stay.

“Diana was totally recognizable, there’s no way you could miss her, though she sat with her back to the room,” said the restaurateur. “And Flannery was very pleasant, very handsome. Not extravagant, not demanding. They were all laughing and having a good time.”

A royalty reporter for a British newspaper said from London that Diana “went out to ski in Colorado to get away from people like me.”

He added: “She achieved her objective. We discovered she had a whole network of friends we never knew about.”

Last winter, the paparazzi shot photographs of the Princess skiing with Flannery, friends and others. But she seems to have taken a lower profile this summer.

A Vail newspaper has so far reported only one person making an I.D.: It was a gas-station attendant who said he saw her pass his pumps in a limousine.

Late Friday, another source reported that she was spotted with her children river-rafting near the Utah border.