The controversy around the death of Diana, Princess of Wales, and her lover, Dodi al Fayed, reignited yesterday after a High Court ruled that a jury must decide if the couple's fatal road crash was an accident or foul play.

The decision marked a victory for Mohamed al-Fayed, the Harrods owner, who successfully challenged the decision by the deputy royal coroner, Baroness Butler-Sloss, to conduct the inquest on her own.

In an outburst on the steps of the Royal Courts of Justice, Mr Fayed said the country was "ruled by donkeys", adding: "They are gangsters and murderers and Nazi bastards who killed my son."

Three High Court judges ordered Lady Butler-Sloss, to empanel a jury after ruling that she acted unlawfully. The senior judges also referred to reported similarities between the treatment by the paparazzi of Kate Middleton, Prince William's girlfriend, and Diana. A jury was the appropriate body to make recommendations for changes to the law to stop similar harassment of royalty and celebrities in the future, the judges said.

The inquest, due to start in May, could lead to a jury recommending legislation to curb "hot pursuits" by paparazzi photographers.

The High Court decision is the latest episode in the saga surrounding the deaths of Diana, 36, and Dodi Fayed, 42. The couple died when their Mercedes crashed in the Pont de l'Alma tunnel in Paris in 1997 as they sped away from pursuing paparazzi after leaving the Ritz Hotel for Mr Fayed's apartment.

A three-year inquiry, led by Lord John Stevens, the former head of the Metropolitan Police, found no evidence of a conspiracy to murder the couple. The inquiry report said chauffeur Henri Paul, who also died, was speeding and over the legal drink-drive limit.

The High Court judges yesterday sought to distance the inquest from the Royal Family to ensure there would be no appearance of bias. They stressed severing the royal connection was necessary because the inquest might consider allegations made by Mr Fayed that the Duke of Edinburgh and "the establishment" had plotted the deaths of Dodi and the princess.

Mr Fayed has alleged the plot was motivated by fears that Diana was having a child with his son - although Lord Steven's investigation established that she was not pregnant.

Later Mr Fayed said: "Diana was the people's princess. The people must be allowed to hear all the evidence and then, and only then, decide how she died, why she died and who ordered her murder."

The High Court judges, Lady Justice Smith, sitting with Mr Justice Collins and Mr Justice Silber, rejected calls for the coroner to stand down from the case altogether. Instead they directed that Lady Butler-Sloss should not preside over the inquest in her role as deputy coroner of the Queen's Household. As a result, Dr Paul Knapman, coroner for Westminster, is to accept jurisdiction for the inquests and appoint Lady Butler-Sloss as his assistant deputy coroner to hear the case.

Princes William and Harry have written to the coroner to say they wish the inquest to be prompt, fair and transparent.