Sutton Coldfield has proudly used its Royal name since 1528 – without knowing that it legally lost the privilege because of a paperwork error in 1887.

A hapless town clerk on a fledgling Victorian council could be responsible for the administrative mix up that saw the town lose its Royal status without even knowing.

It has emerged that the Royal Charter should have been renewed by officials when the new borough council was created in 1887.

Buckingham Palace is now warning that any revival of the title, which was bestowed on the town by Henry VIII, could be hampered by its “illegal use”.

The incredible and potentially costly oversight has been unearthed by a local resident who is campaigning to reinstate the title in time for the Queen’s Diamond Jubilee.

Birmingham City Council’s legal department has contacted Buckingham Palace to investigate how Sutton can reclaim the title that had stood in place for 359 years.

Sutton resident and urban regeneration expert Nick Corbett is spearheading the campaign for its reinstatement. He said: “Many people assume Sutton lost its Royal Town status when it became part of Birmingham in the 1970s, but that is not correct.

“When the new Borough Council of Sutton Coldfield was created, they forgot to renew the Royal Charter.

“Once the council was established the borough councillors should have applied to the Lord Chancellor to renew the Royal Charter.

“It seems they continued to use the Royal Town name even though, legally speaking, they shouldn’t have. Perhaps they were poorly advised by a clerk or borough solicitor?”

A council letter to Mr Corbett said: “The legal department investigated the possibility of using the prefix ‘Royal’ in the Sutton Coldfield name and confirms this will not be possible without the permission of the Lord Chancellor.

“This was confirmed by Buckingham Palace which also stated that any unauthorised use would severely damage a future application for permission.”

Sutton Coldfield is the only town in England to have lost its royal status, which was secured with the help of its most famous resident, John Harman.

Harman, who was born at Moor Hall Farm, became Bishop Vesey and an adviser and friend to Henry VIII.

He used his wealth and influence to turn Sutton into a prosperous town and his legacy includes the establishment of Sutton Park, Sutton Coldfield Municipal Charities, a house building programme for the poor, a grammar school, a market place, and bridge building programme.

When he became the wealthy Bishop of Exeter, he funnelled the riches of Devon back to his building projects in Sutton Coldfield.

He was also responsible for securing the Royal Charter.

Mr Corbett said: “When you unravel the layers that make a place what it is, you sometimes find key place-shapers who have left a big legacy.

“In the case of Sutton Coldfield it’s John Harman who has left the biggest legacy. Sutton Coldfield can learn a lot about vision and urban regeneration from John Harman.

“In response he developed a long -term strategy to renew the town. The reason for the campaign for the Royal Town name today is that we need to raise investor confidence again in Sutton Coldfield.

“The Sutton Coldfield town centre masterplan needs more than £1 billion of private sector investment to deliver it. This plan can’t be left on a shelf to collect dust, it needs to be implemented.

“The royal name could help with place branding and raise investor confidence. It could be reinstated as part of Birmingham’s celebrations for the Queen’s Diamond Jubilee in 2012.

“But this is only going to happen if people in Sutton ask for it. I worked for the Royal Borough of Kensington and Chelsea for seven years and I have seen how a royal name pre-fix opens doors to investors around the world.”

Mr Corbett is urging local residents to lobby Sutton Coldfield MP and International Development Secretary, Andrew Mitchell.

Mr Mitchell said: “This is an interesting idea and most people would agree that we should pursue it.

“Unfortunately the last Labour Government was unhelpful on this issue but I am already in discussions with Ken Clarke, the Lord Chancellor.”