Princess Diana’s summer month spent at South Coast hideout

A span of 15 years separated these two visits in 1981 and 1996, years that contained nearly all of her adult life and more than a few of her growing pains. The Sydney society and charity fixture Marie Sutton, who helped pull off the celebrity coup of the decade when she brought a divorced Diana to Australia in late 1996, tells Good Weekend: "Her greatest achievement was that she didn't go under ... She was a different woman by 1996."

It can be argued that Diana grew up more quickly than we did: there was no dithering when the time came for her to ditch the Windsors and make her own way in the world. It can also be argued that so complete was the devotion she inspired here that it lessened the chances of Australia soon following her bold example of leaving the Windsors behind. A rebel she might have been, but her son was still the future king. Diana might have dreamed she could have it all but, when put to the test at the 1999 republican referendum, Australia wasn't so sure it could.

We could debate the whys and wherefores of that question, but what cannot be contested is that Australians adored – utterly adored – the Princess of Wales or, at the least, were transfixed by her story in spite of themselves. Jane Connors, who in later life wrote a history of royal tours, confesses that, as "a dour left-wing feminist" in the early 1980s, she wore a "Don't Do It, Di!" badge – but still threw a party to watch the royal wedding in 1981.

Today host Lisa Wilkinson, who observed the Diana phenomenon as a magazine editor in the 1980s, says she, like most of us, was hooked from the minute the future princess appeared on our front pages posing with kids at a London kindergarten, her legs famously backlit through her thin skirt. Wilkinson was the editor of teen bible Dolly at the time: "I don't think there was any generation that wasn't fascinated by this young girl who we later discovered had pretty much been thrown to the wolves."

You can ask ordinary folk, like Brett Hooey – the lifesaver immortalised alongside her at the NSW Central Coast's Terrigal Beach in his Speedos in 1988 – who says today: "When she looked at you, you just melted." Aviva Basger was just eight when she met Diana in Sydney in 1996. "It's burned on my brain," she says. "She was so lovely." Basger's mother hadn't told her where they were going when they climbed into the car for an afternoon trip which took them, via a florist for a bunch of white roses, to the InterContinental hotel in Sydney's Double Bay. There, they joined a large crowd of onlookers outside the building from which Diana was shortly expected to emerge.

When she did, however, she jumped straight into a waiting limousine. There was to be no walkabout that day. But as the limousine pulled around the hotel driveway, it suddenly stopped in front of Basger, who stood clutching her bouquet of roses. "The windows rolled down and I could just see her in this beautiful white suit," she says. "I gave her the white roses. She said, 'Thank you, they're my favourite.' " Basger still owns the dress she wore that day.

Other people still have their souvenir scrapbooks, tea towels and teaspoons, and talk about their encounters as if they happened yesterday. You can even ask the great and the good. As Victorian Labor premier, John Cain hosted the Waleses on three official tours in the 1980s. "A sparkling personality, great company," the staunch republican says of the princess, although he also shows Good Weekend a private diary entry from 1983 that hints at the challenges she faced. "She's obviously very shy and really doesn't know yet what it's all about," he wrote, "but she does her best and does it quite well."

Cain's NSW counterpart Barrie Unsworth, Labor premier during the 1988 Bicentennial jamboree, was also captivated. Like many, he was disarmed by her evident vulnerability. "We were talking and she said, 'Do you have much trouble with the media?' And I said, 'Do I ever!' And she said to me: 'In your situation, you can walk away from it. I can't.' "

Her last chance at doing that – at least with any hope of salvaging a private life in the process – had vanished seven years before that lunch with Unsworth at Circular Quay. In Australia in February 1981, Diana – already secretly engaged to the heir of the throne –found space for a private period that seems especially poignant, even haunting, given what would happen to her over the next 16 years as the woman her brother would come to describe as "the most hunted person of the modern age". For, over the course of a summer month spent in Mollymook on the South Coast, the 19-year-old virgin who was destined to become one of the most photographed human beings in history was never once captured on film.

Lady Diana Spencer was used to things being named after her family in Britain; it's not clear if she knew there were places whose name and history she shared in Australia but, long before she ever came here, the ties ran deep. The Spencer Gulf in South Australia? Named for the second Earl of Spencer, Diana's forebear, by explorer Matthew Flinders in 1802. In the late 1940s, the eighth Earl – Diana's beloved father, Johnnie – served as aide-de-camp to the governor of South Australia. And in early 1981, a few months into her startlingly shallow courtship with Prince Charles, Australia offered an escape route from the attention of a frenzied British media pack.

Her mother, Frances, had married Peter Shand Kydd, heir to a wallpaper fortune, and he owned a sheep farm in Yass, NSW. According to Tina Brown's 2007 book, The Diana Chronicles, Frances had reservations about the royal engagement. "[She] whisked Diana off to a remote hideout in Australia to throw off the press and make her think more seriously about the momentous step," Brown writes. The Fleet Street mob had a fair idea where Diana had gone – likely Australia, and therefore Yass – although no one knew for sure. A wire service report told a breathless world in February 1981: "Lady Diana Spencer, the favourite in the Prince Charles marital sweepstakes, is in Australia, or the Caribbean, or none of the above."

As recorded by Andrew Morton in his 1992 book Diana: Her True Story, there were no sheep in sight at the actual Spencer hideout: a beach house near Mollymook Golf Club. The media didn't find Diana, but she didn't go completely unnoticed. Margy Nyholm, who owned the Beach Hut, a fish-and-chip shop, had heard talk that Diana and her mother were in the area, and when a tall, quiet and apparently anxious young woman began appearing in the shop day after day with other English women in tow, she twigged.

"She was attempting to be incognito, but instead she stood out," Nyholm tells Good Weekend 36 years later. "She was a very tall girl, young with very white skin. She wore a scarf, big dark glasses and a beach coat. And it was summer – February – and my kids had gone back to school. She would come in and stand at the bain-marie. She'd just buy a Popper – a little fruit-juice box. She wouldn't make eye contact. There was a fragility about her. A beautiful-looking woman, but not a happy one."

This was, of course, nearly all mind-reading on Nyholm's part, but it tallies with Diana's own memories of the 1981 visit. "A disaster," as she told Andrew Morton during their secret, marriage-detonating book collaboration a decade later. Diana couldn't relax; she fretted furiously about her groom-to-be, who wouldn't return her calls. "I thought that was very strange," she told Morton, an unease that evidently didn't leave her for their entire marriage. Later in February she returned from Australia to London, the engagement announcement imminent.

By Tina Brown's account, veteran correspondent James Whitaker called Diana at home to ask about her holiday. "Something about her voice told him this would be the last time she picked up her own phone. 'Goodbye, Mr Whitaker,' she said. 'And thank you.' "

On February 24, 1981, the world watched as Charles paraded his bride-to-be for the camera, a stonking ring on her finger and a large knot of anxiety in her stomach. The press call yielded an instant which is now burnt into the collective memory, says Lisa Wilkinson. When the interviewer asks if they are in love, Diana replies, coquettishly, "Of course!" Charles replies, "Whatever 'in love' means."

When the Waleses' plane touched down in a boiling Alice Springs on Sunday, March 20, 1983, it was clear this was going to be no ordinary royal visit. Australia had a new prime minister – Bob Hawke had swept Malcolm Fraser from office just a fortnight before – and the Prince and Princess, in a break with royal tradition, had brought their nine-month-old son, William, with them.

"The Queen would never travel with Charles in case they both went down and Charles was not supposed to travel with his new son," says Jane Connors of a tour she calls the most significant since the Queen visited Australia in 1954. "Bringing William was what made it really different. There was a huge amount made of Diana being a breath of fresh air and [so] modern. It was enormous."

The baby prince was deposited with his nanny at Woomargama, a sheep station near Albury, so chosen because its location allowed the royal couple to fly back to him every night. The British press laid siege to the farm, desperate for news of the young prince's progress.

Ruthie Farrar, an RAAF flight steward working on the VIP aircraft assigned to the royal visitors, had an intimate, up-close view of the princess on tour. She was, says Farrar, clearly learning on the job: "Nobody seemed to have told her what to do or trained her." But compared with many VIPs who find their way onto the government fleet, Diana was a pleasure to serve. "She had this way of making you feel like her friend," remembers Farrar. She nurtures a lifelong memory of being given William, briefly, to cuddle.

The story Fleet Street was missing, however, was far more serious: a marriage already under strain and a wildly popular princess sometimes fraying at the seams while also beginning to understand the astonishing power of her celebrity. "Traumatic," Diana later wrote of the first week; it was, she added, "the week I learned to be royal". And from the School of the Air in Alice Springs to a dazzling mayoral ball in Brisbane, just about everyone in Australia, it seemed, was falling under her spell.

In his private diary, John Cain wrote of the astonishing crowd reaction when the couple visited Cockatoo near Melbourne, where the community was still recovering from the Ash Wednesday bushfires of February 16, 1983. "Astounding," Cain wrote. "People still respond to the mystery and aura and all the trappings that surround royalty."

Charles, Cain wrote, was an old hand at royal duties. But Cain tells Good Weekend that he saw hints of the private strife Diana later revealed about her husband's jealousy. "The prince did indicate to me in one of the several discussions we had that people responded more warmly to his wife that they did to him," he recalls. "He felt she was the subject of more attention and acceptance than he was."

Diana, too, was feeling the tension. As she told Andrew Morton for Diana: Her True Story: "Everyone always said when we were in the car, 'Oh, we're on the wrong side, we want to see her, we don't want to see him' … and obviously he wasn't used to that and nor was I."

But all the thronging crowds on the street could see was a fairy tale. In Cockatoo, the traumatised community welcomed the royal couple with open arms. Firefighter Eric Bumpstead remembers that extraordinary day: "I think [the visit] helped the morale of the community a lot. It showed them they weren't on their own. They [Charles and Diana] were very conscious that they didn't want to be the main [focus].

"They were there genuinely to support the victims and they didn't want to feel as though they were strangers pushing into the area. They asked us a couple of times what we thought about it and if we thought it was appropriate or not."

Publicly, the tour was a success that wowed and stunned even veteran Buckingham Palace hands. As Tina Brown wrote, they had little idea what to do with this unrivalled new star in their midst.

BY the time Diana and Charles arrived in Australia on the second official tour in November 1985, the daylight had not quite seeped in and the public fantasy was still intact. There was even a second child to admire, Harry, born in September 1984. But in private, the marriage was in free-fall. We know now that both were having affairs, Charles with his old flame Camilla Parker-Bowles and Diana with army officer James Hewitt. But you wouldn't have known it to see them.

The most famous moment of that tour came at Melbourne's Southern Cross Hotel when Charles whizzed his blushing wife around the dance floor at a charity do as the band played Isn't She Lovely. And she surely was, stopping the show in an emerald-green gown teamed with an emerald choker – worn as a headband. The couple beamed.

Ian "Molly" Meldrum, the TV and music industry personality, spent considerable time with Diana in his role as host and organiser of a Rocking With the Royals concert on the banks of the Yarra. "She was very open with a great sense of humour," says Meldrum. Indeed, so relaxed was she that on one limousine ride from a charity event, Diana prodded Meldrum to make a quick stop at Meldrum's Richmond home.

As Meldrum recalls: "She says to me, 'Can I have a look at it, please?' Lynne Randell was my PA at the time. God bless her, she was in the kitchen making tea and I walked in and said, 'Your Royal Highness, this is my personal assistant, Lynne Randell.'

"And Lynne looks at me and says, 'You've got to be f---ing kidding me!' We all had a laugh."

John Elliott, then a beer baron and president of the federal Liberal Party, also has only happy tales to tell of the 1985 tour, during which he achieved his greatest publicity coup – getting the royal couple to present the trophy to the winner of the first Foster's-branded Melbourne Cup. Over lunch before the big race, Diana said to Elliott: "Wouldn't it be great, Mr Elliott, if the first Foster's Melbourne Cup could be frothing over with Foster's?"

Elliott loved the idea; the Victorian Racing Committee hated it. But Elliott got his Diana-fuelled global publicity bonanza anyway when Charles joked in his speech that the cup would be overflowing with Foster's if most of the supply wasn't in London.

Brett Hooey has never forgotten it. How could the Newcastle lad when his moment on the world stage was this one: he, a strapping, 23-year-old, sun-bronzed lifesaver from central casting standing side-by-side on the sand with a real-life princess?

Following his encounter with Diana in late January 1988, as she presented medals at a surf life-saving carnival at Terrigal, the irresistible image of them together beamed around the world. It's a moment Hooey treasures. "When she walked down the stairs, it was like she had a little dust cloud around her … it was amazing," Hooey recalls. "She was in her own cloud and when you looked at her, you just melted. She took your breath away.

"The way she'd speak to you, you just felt at ease. Everything she had – it all came from inside. The way she spoke to me, the way she touched me, was perfect."

The January 1988 tour by Charles and Diana was all razzle-dazzle and timed to coincide with the Bicentennial Australia Day celebrations on Sydney Harbour. There had been hints aplenty that all was not as it seemed in the marriage by this stage but, my goodness, how they fooled us. Tina Brown writes of the images of conjugal serenity that flew around the world from their various Australian pit-stops, "They put on such a sparkling display of marital unity at a dinner dance in Melbourne that even [James] Hewitt was impressed – and a little baffled."

As then NSW premier Unsworth says, though, whatever else royal life is, it is essentially a job and, whatever difficulties were consuming them behind the scenes, the prince and princess were consummate professionals. "I thought Charles was quite attentive," Unsworth says. "They were a great couple. They were doing a job and they did it very well."

It wasn't to last, of course. The 1988 tour was their final Australian visit together. Diana wouldn't return for another eight years, for one last spectacular show.

Marie Sutton first met the Princess of Wales at a private function on the NSW Central Coast in 1983. The woman she helped bring back to Australia in 1996, as the very special guest at the launch of the Victor Chang Cardiac Research Institute, was a very different person. "Diana was a survivor and I would say that after what she went through at such a very young age, the greatest thing about her was that she stayed sane," Sutton recalls.

Post-divorce, pre-Dodi Fayed, this was the Diana of endless possibility, of a select few good works – and the Diana who was now privately seeing a London-based heart surgeon who'd once worked in Sydney. It was this connection between Diana's new beau, Hasnat Khan, and doctors at the new Chang facility that helped pave the way for what was an extraordinary PR coup.

And by this stage of her life she was, says the Chang Institute's Professor Bob Graham, much more than just a pretty face decorating a cause: "She knew quite a lot about heart disease actually."

It was all a long way from the shy and uncertain ingénue Australia had met and embraced in 1983, but Graham says the quality that drew people to her remained intact. "What appealed to me most was when we went one time from the institute across the road to the hospital to visit patients," he says. "There was a huge crowd outside and there was a woman with a baby. Diana went right up to the woman and held the baby. You could see she was driven by what made her feel good. And maybe reading between the lines, what she might have missed out on as a child, someone to cuddle her and nurture her and make her feel wanted."

That's a reminder that although she could be, as Clive James wrote after her death, as captivating as a giggling sunrise, there was much more to her than just the familiar Diana spellbinding glow.

And yet, in life and death, nature nearly always provided the needed reference point. She was the sun or a storm, a lamb or a lioness, a seed growing or a stem broken. At her funeral, close friend and favourite performer Elton John summoned one more metaphor for a country in mourning: a lament for England's rose.

In Australia, though, she had been another thing: a rose, perhaps, but one that had bloomed in the shade of eucalypts and wattle trees. Quite why we fell for her so hard is not entirely to be explained or understood. We just did, and she mostly made the falling worthwhile.

Good Weekend