One of Princess Diana's most famous dresses sells for £264,000

One of Diana, Princess of Wales's most famous dresses has finally sold post auction for the price of £264,000.

The dress that Diana, Princess of Wales wore while dancing with actor John Travolta that has been auctioned for 264,000 pounds

Diana wore the midnight-blue, off-the-shoulder, velvet gown by Victor Edelstein when she danced with Hollywood actor John Travolta during a state banquet at the White House given by US President Ronald Reagan in 1985.

Bids on the gown, which Diana originally spotted in burgundy but asked Edelstein to make in blue for her, did not reach the reserve price of £200,000 at an auction on Monday.

The dress was later sold post-auction to a "British institution" for a hammer price of £264,000 including the buyer's premium - and the auctioneer said the seller was delighted as "he hoped it would stay in the UK".

It was the star attraction when Diana auctioned off scores of her outfits for charity in 1997, and sold for more than £120,000.

Diana and Travolta had twirled across the White House dance floor to a medley of Grease and Saturday Night Fever.

The actor described the experience as being "like a fairy tale".

Two other items from her wardrobe also formed part of the sale.

A long-sleeved Katherine Cusack evening gown, also midnight-blue velvet, from 1986 went for double what was expected.

It was estimated to sell for between £20,000-£30,000, but was sold for £60,000 including buyers' premium.

A navy wool dress with wide, white collar by Catherine Walker from 1989, estimated to go for up to £6,000, went for £35,000, including buyers' premium.