Lord Ivar Mountbatten, son of the 3rd Marquess of Milford Haven and cousin to the Queen, is in a reflective mood. He picks up a photograph taken 24 years ago on the day of his wedding to his former wife Penny, the mother of their three daughters. 'That was the best day of my life,' he says. 'I loved it.'

Two years ago, Lord Ivar created quite a stir when he confessed to having struggled with his sexuality throughout most of that 16-year marriage. Finally, he admitted he was gay after finding contentment with his new love James Coyle, whom he met in the swish Swiss ski resort of Verbier.

Later this summer, the two men will marry in the private chapel on his magnificent country estate in Devon. It will be the first ever same-sex marriage in the extended Royal Family.

Lord Ivar Mountbatten (right) with his fiancee James Coyle and former wife lady Penny Mountbatten at their home in Uffculme in Devon

For the sake of their daughters, Ella, 22, Alix, 20, and 15-year-old Luli, Lord Ivar, Penny and James, who now considers the girls to be his children, too, want the announcement to be handled with dignity. This is why we are all here in this, shall we say, rather unconventional family's Grade I listed home near the village of Uffculme in Devon.

'We really are a funny threesome,' quips Lord Ivar as he shows me into the drawing room. Penny and James both look bemused. 'Not in that way.' He roars with laughter but knows he is enormously fortunate in the way life has turned out for him and his family.

For not only is Penny, from whom he was divorced eight years ago, incredibly supportive of the union, but she is actually going to give her former husband away at the ceremony.

'It was the girls' idea,' says Penny in her first interview on this most sensitive of subjects. 'It makes me feel quite emotional. I'm really very touched.' Touched? Many women would be trashing the family pile.

Penny is the sort of attractive, sparky woman that most red-blooded males would be falling over themselves to whisk up the aisle. Isn't it, well, a little odd to be handing over the husband she once loved with all her heart to another man?

'Not at all. You and I have got on from the first ten seconds of meeting each other, haven't we?' she says to James, the man who is due to become her former husband's husband.

'What I don't think Ivar realises is how much he has changed as a man since he 'came out'. James is hugely responsible for that because he's so much fun.

'Ivar is so much more relaxed these days. He's so much kinder. He's become a great cook. I now call him Fanny Cradock. He probably wasn't even aware that by keeping his sexuality a secret it was really quite tormenting him. Now it's 'out' he's a completely different person. Everybody says they've never seen him happier.'

The former couple pose with their three daughters at a polo match in West Sussex in 2005

This impending marriage, indeed, has the full blessing of their extended family and those closest to them, including Lord Ivar's lifelong friend Prince Edward, to whose eldest child he is a godparent. The Earl and Countess of Wessex are also godparents to his two eldest daughters.

'Sophie and Edward know of our plans and are really excited for us,' says Lord Ivar. 'Sadly they can't come to the wedding. Their diaries are arranged months in advance and they're not around, but they adore James. Everyone adores him.

'All my good friends have accepted James. I basically told everyone: 'I've found somebody — it's a bloke.' They just started laughing. Then they met James and one particular mate said: 'If I was gay, I'd certainly go for him.' He lowers his voice conspiratorially as Penny and James disappear together to sort out lunch.

'Now they're both out of the room, I can say they are both so similar. James hates it when I say that, but, oh God, they're so caring and so giving.

Aristocratic ideal: Lord Ivar Mountbatten and Penny on their wedding day 24 years ago

'Growing up in Glasgow was challenging for James. He once overheard his father, who was a strict Catholic, calling him 'the queer one'. He wondered who he was referring to.

'James was once dangled by his ankles from a bridge, 40ft over the River Kelvin, by a bunch of thugs. When one of the thugs said, 'Let him go,' he assumed they were going to allow him to escape. They were actually going to drop him in the river. He's so sweet. He just thinks the best of everybody.'

He replaces the photograph of his earlier wedding, attended by Princess Margaret and Prince Edward, on the side. 'I loved Penny when we were married, as I still do very much, and I loved our family unit,' he says. 'I never thought this would happen. It's brilliant, but I never thought I'd marry a man.

'When I mentioned it to our eldest daughter, Ella, she said, 'Oh Pap, it's not a big deal. It's so normal nowadays'. Of course that generation, they're completely cool about the concept of this — maybe not so cool about their own father, which is completely understandable.' He sits forward on the sofa.

'Being completely truthful, it doesn't sit comfortably with me that I'm going out with a man,' he confides. 'I've lived my whole life as a heterosexual. So, all of a sudden, having a bloke around is unusual — even now. It's brilliant but I suppose in an ideal world I would prefer to have a wife because that has always been the norm.

We were talking with friends in Bermuda about this nature-nurture business not so long ago. I knew from the age of eight I was more attracted to men. I definitely think it's in the genes. You're either gay or you're not.'

Penny and James, an airline cabin services director, return to the room. 'Everything all right?' he asks James. The two men are clearly inordinately fond of one another. Intriguingly, it is Lord Ivar who insisted upon marriage. 'I really wanted to do it for James,' he says. 'He hasn't been married.

'For me, what's interesting is I don't need to get married because I've been there, done that and have my wonderful children; but I'm pushing it because I think it's important for him.

'James hasn't had the stable life I have.' He turns to his partner. 'I want to be able to give you that.'

James returns his smile. 'It's a very modern marriage,' says James. 'There was no proposal, just an acceptance of this great love. He cares. I care. The girls are very accepting. Three years ago [they met in March 2015] they were saying: 'Wow. Are you guys going to get married?'

'We said: 'Don't be ridiculous. It's absolutely not on the radar at all.' But gradually it has become something that makes sense. Now we've started to get a plan in place, I'm getting a lot more excited. We went to a wedding a couple of weeks ago and said: 'We're not doing that. We're not cutting cakes. We're not having a first dance.'

'We'll be pronounced partners in marriage, but the ceremony itself will be very small. It's just for the girls and close family and friends.

'Everyone else — about 120 friends — will arrive for the party afterwards. We'll have lovely food and really good music, but there won't be two men in tuxedos on a cake, white doves or anything twee or contrived like that, will there?'

Lord Ivar looks appalled at the very thought of it. 'We'll probably have cheese, instead of cake.'

Penny, who now shares her life with her partner of two years, IT consultant David Hurst, in central London, is helping James with the wedding arrangements, because, she teases, 'Ivar will just delegate, won't you darling?'

With a flourishing career as a brand ambassador, she has, she says, 'never been happier'. This is the only interview she has given since her former husband came out and she is determined to do so with absolute honesty.

What will James Coyle's title be? The unprecedented marriage begs the question as what title Lord Ivar's fiancee will take. If Lord Ivar, the third son, was to marry a woman, she would take the title of lady. But hereditary titles that are passed down do not yet make provision for same-sex marriages. The Equality (Titles) Bill was introduced by Lord Lucas in the House of Lords on 13 May 2013. It would allow both female first-born descendants to inherit hereditary titles as well as for 'husbands and civil partners' of honours recipients 'to use equivalent honorary titles to those available to wives'. This would mean Coyle would become a Lord. However, the Bill is currently in Committee stage. Advertisement

'I married Ivar with a completely open heart and an open mind about sexuality. Ivar had told me he was bisexual before he proposed. I didn't have any fears about it because I loved him, and love conquers all, doesn't it?

'What I hadn't realised is how jealous I would feel down the line when he was finding men attractive and how, ultimately, that made me feel that I wasn't good enough.

'When I started feeling lonely and depressed, I dulled those feelings with alcohol and of course that made me more depressed. That was difficult for Ivar. If there were two things Ivar and I could have changed about ourselves in our marriage, I wouldn't have drunk so much and you would, perhaps, have changed your sexuality?'

Lord Ivar nods. 'Certainly, without doubt, most gay blokes my age would prefer to be heterosexual. The hassle of having to keep it a secret, the . . .' He looks truly anguished. James does too. 'First of all there's the suppression of it and disbelief. Then there's denial. Thankfully, attitudes have changed.

'I had a really happy childhood but I could never tell my parents I was gay. Where I grew up, gay men were called poofs, queers, everything derogatory under the sun.

'In 15, 20 years' time people will struggle to understand how we came to be having such conversations. People will look back and say, 'What's the big deal?' But for our generation it was.'

Penny, the daughter of a Sotheby's representative, was 27 years old and had known Lord Ivar for two months before he confessed to her about his attraction to men.

After studying to be a geologist, he told her he'd had a brief relationship with a man in Venezuela before returning to in his late-20s to run the family's huge Grade 1 listed Elizabethan country house, Moyns Park, in Steeple Bumpstead, Essex.

'I didn't want to get married and have a secret,' he explains today. 'It would be unfair to trap someone into a marriage and then tell them you're bisexual,' he says. 'I hadn't really told anybody else. It was a little secret that a lot of men had at that time. My fling in Venezuela just felt . . . how do I describe it? Right. But I sort of had to suppress those feelings, particularly in my position.

'I didn't want to go and have assignations that might cause controversy. It was the convention of our generation that you got married — to a woman.'

Penny says she was deeply touched by his confession.

'When I met Ivar he seemed so alone, so I kept inviting him to all the parties and events I was organising,' she says. 'We were in Hampshire, where I was renting a cottage, and we went for a long walk when we had a chat about the fact he thought he might be bisexual — at least he said he was attracted to men as well as women — and never thought he would get married.

'I could sense he was quite relieved sharing his secret, particularly with someone who was so receptive. Because I have lots of gay friends and cousins, I'm very open-minded about sexuality. He seemed like he'd offloaded a huge burden. It definitely made us closer from that moment onwards because he trusted me.'

Over the following months their friendship deepened. 'We first got together when Ivar invited me up for his 30th birthday party at Moyns. I stayed on afterwards to help him start his event management business and sort of never left after that.

'I guess we fell in love while organising Moyns as a business and riding horses daily around the estate — making plans.

'Then, one day, Ivar said, 'If I ask you to marry me would you say yes?' ' She said she would.

And did. Penny gestures to the photograph of that very proper wedding back in April 1994. 'I was wearing the heavy family tiara which made my hair flop forwards. I remember Princess Margaret was sticking in the pins to hold it on when we signed the register.'

Those early years of marriage were blissfully happy times: glamorous trips around the world, family holidays in Bermuda, long weekends spent with Joan Collins in the South of France.

Lord Ivar readily admits the Mountbatten name opens doors, but it comes with a responsibility too. 'I think you're always aware of that,' he says. 'I mean you can't run naked down the High Street, can you?' They left Moyns for

Bridwell when their daughter Ella was nearly two and Penny was pregnant with Alix. 'It was idyllic,' says Penny. 'Bridwell is the most wonderful family home. The girls learnt to ride their bikes on the drive and every evening we'd have plays or they'd be swimming in the pool. We used to fill this house every weekend with house parties and entertain all the time, didn't we?'

On the face of it, the Mountbattens had one of the happiest marriages in the aristocratic circles within which they mixed. But, privately, Lord Ivar was discretely exploring his sexuality.

'Penny accepted me for who I was, so perhaps I relaxed and felt I could explore that part of me as our marriage matured. Maybe what happened is, with me being so open, I'd mention it to Penny and that would make her upset.

'Perhaps, on reflection, I shouldn't have said anything but, again, I don't want ever to hide anything from anybody.'

Penny interjects: 'But I always asked for and demanded complete honesty from Ivar. Perhaps that is a self-destructive part of me, but I wanted to know. I gave him his freedom because I wanted him to be happy.'

Lord Ivar considers this. 'I was never unhappy in our marriage,' he says. 'I adored Penny — really loved her. But I always describe it as trying to get a square peg into a round hole. Deep, deep down, since her childhood, Penny hasn't valued herself very highly and couldn't accept I loved her.'

Happy as each of them is now, their regret is a palpable thing.

'Ultimately, I remember you saying I want to have someone who wants me for me, and I couldn't give you that,' says Lord Ivar.

Fifteen years after that joyous wedding day, Penny left him.

'I gave back all the chattels, all the Mountbatten jewels and left with nothing,' she says.

'There was quite a lot of judgment — 'Why has she done this?' — because hardly anyone knew about Ivar's sexuality, which was hard to swallow.

'But I was approaching 40 and thought, 'It's now or never. I'm going to stay in this marriage, where I don't feel our relationship can ever be whole, or leave.' I knew Ivar couldn't be his authentic self unless I left. We both had to take wing and be the people we needed to be.'

Today, Bridwell is on the market. Lord Ivar wants to begin his married life in a new, smaller home where each of his daughters has a bedroom, but he is able to travel at whim with James.

'As you get older you want an easier life,' he says.

'A big house can be a real burden. I think I'd have done a lot more with my life if I hadn't had to come back from South America to look after my family home, Moyns, which was vast.

'I'm a geologist by profession and would have been really happy to continue living in South America. Once Penny and I parted company I knew I didn't want to keep up the pretence. Then when I met James, I thought, 'This is exactly the route I want.' We want to grow old together.'

Meanwhile, Penny spends her time in London where she can concentrate on her new business, Penny Mountbatten London. Her career, she says, 'became my lifeline' in those first difficult years of her life apart for Lord Ivar.

'I said to James this morning, 'I don't think I've ever felt as happy as I do right now.' I've always loved Ivar wholeheartedly and he knows me better than anyone else on this planet, he often tells me how proud he is of what I've achieved.

'I'm proud too. Finally I am able to love myself and the reason this marriage is acceptable to all of us, particularly our lovely daughters, is because of the character of James, the nature of the beast — the gorgeous beast.'