They said the US President will definitely be coming to London on an official trip later this year.
Downing Street sources last night confirmed an official invitation for a State visit had already been accepted and was expected to happen this year, though they remained tight-lipped about when.
A source said: “Any discussion about a working visit was absolutely separate to the State visit, an invitation for which has been both given and accepted.”
US diplomats in Britain were “caught completely by surprise” when Mr Trump posted a message on his Twitter account on Thursday stating he would not be attending next month’s ribbon-cutting ceremony to open the new £750million US Embassy in Nine Elms.
In his tweet he wrongly blamed the Obama administration for having relocated the embassy from its home of 80 years in Grosvenor Square to an “off location” in Vauxhall.
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But last night sources close to the Trump administration said the president wanted his first official visit to Britain to be a State occasion.
They said: “A State visit will happen sooner than people think. And the feeling is that it won’t be Balmoral Castle (the Queen’s Scottish residence), but London.”
However Mr Trump, who owns two golf courses in Scotland – the historic Turnberry near Glasgow and Trump International Golf Links near Aberdeen – will use the occasion to visit one, if not both, during his visit.
Labour leader Jeremy Corbyn had urged people to protest at Trump opening the US embassy.
President Trump was “aware” of the likelihood of some element of protest and the avoidance of two visits in close succession was “possibly also a factor”.
“But actually he wants his first visit to be a State visit,” added the source.
“If France can welcome an important ally properly, then so can Britain.”
Another source, who knows President Trump personally, said: “He needs something more significant than the opening of an embassy – which, for whatever reason, he has taken against – to come to.
“He does not like cutting ribbons unless its for one of his own buildings.”
The move removes pressure from Foreign Office mandarines, who have been anxious at the prospect of President Trump not being invited to May’s royal wedding without a date for a State visit being firmly in the diary.
While former US president Barack Obama, who built a personal rapport with Prince Harry, may receive an invitation to his wedding to US actress Meghan Markle, it is unlikely one will be extended to President Trump.
Though an ardent fan of The Queen he has previously made disparaging remarks about the Princess of Wales.
London’s Labour mayor celebrated news of Mr Trump’s cancelled visit, claiming: “Many Londoners have made it clear that Donald Trump is not welcome here while he is pursuing such a divisive agenda. It seems he’s finally got that message.”
Labour’s comments were seized upon by Foreign Secretary Boris Johnson who said: “The US is the biggest single investor in the UK – yet Corbyn seems determined to put this crucial relationship at risk.”
Apart from shared security values, Britain and the US share the world’s largest bilateral investment relationship, worth almost £1trillion.
The US remains Britain’s biggest single investor, contributing more than £20billion to the economy every year, while British business in the US is worth £105billion annually.