The young man, identified as Steve Kaye by London newspaper The Mirror, was employed as one of the Queen's footmen. Kaye allegedly starred in a hardcore gay porn film involving multiple partners.
According to The Mirror, Kaye appeared alongside the Royal Family in their Golden Jubilee family photo last year. He is said to be in close contact with the Queen and was even one of the footmen scheduled to serve the Queen her Christmas dinner this year.
According to The Mirror, Kaye has been trying to sell his story to the tabloids for around $40,000, offering up lurid details about the "wild sex and drug parties" that regularly take place in the palace among employees.
Kaye is alleging that the Royal Family was well aware of the drug use and orgies on palace grounds.
While no specific information on Kaye's porn film has yet been released by the Royal family's legal team, Kaye is suggesting that it was generally known he was porn actor and that he has audio tapes of sex conversations with other palace staff as evidence.
Monday's royal scandal comes on the heels of allegations against Prince Charles earlier this month that the future king was seen in the midst of a romantic interlude with one of his male staff members.
According to The Mirror, Prince Charles' misstep was recorded in a diary years ago by the late Princess of Wales, which after her death fell into the hands of her butler, Paul Burrell.
A London tabloid newspaper is said to be offering a million dollars for any scandalous stories brought forth by former or present employees of the Royal Family.