London: Ministers ordered the bugging of Edward VIII’s telephones in Buckingham Palace and in his Windsor retreat at the height of the 1936 abdication crisis, hitherto secret papers reveal.

The extraordinary move, reflecting a growing and deep distrust between the king and his ministers, is disclosed in a unique cache of intelligence files hidden until now in a basement at the Cabinet Office in the heart of Whitehall.

Among the files is a scribbled note, dated 5 December 1936 and marked “most secret”, from the Home Office to the head of the General Post Office, Sir Thomas Gardiner, referring to an order from the home secretary, Sir John Simon.

It states: “The home secretary asks me to confirm the information conveyed to you orally that you will arrange for the interception of telephone communications between Fort Belvedere and Buckingham Palace on the one hand and the continent of Europe on the other.”

When not at the palace, Edward stayed at Fort Belvedere, his bolthole in Windsor Great Park. Edward’s mistress, the American divorcee Wallis Simpson, was staying with friends in the south of France at the time.

The panic in the British establishment provoked by Edward’s affair with Simpson and his apparent belief that he could get away with marrying her and remain king has been widely reported.

What has not been disclosed until now is how the lack of trust in the monarch was such that ministers went to the lengths of recording his personal conversations.

The Queen’s advisers at Buckingham Palace were consulted about the decision to release the file, the Guardian understands.

Deep anxiety in Whitehall and the government’s fear of losing control of the situation led to a close watch of outgoing telegrams. One that was intercepted and blocked was from Neil Forbes Grant, London editor of the Cape Times.

Summoned to see the home secretary, Grant was told there was no truth to his report that the king was about to abdicate and that if the news had reached South Africa and then been telegraphed back to Britain, the reaction might have been “of a most serious character”.

Simon wrote: “I reminded him that in 1815 a false rumour that we had lost the Battle of Waterloo produced a financial crisis and ruined many people. I asked him if he did not realise that his responsibilities as a journalist and an Englishman made the sending of such a message without definite authority as to its truth very improper and reckless.”

Though Grant insisted he had got his information from “a very highly placed source”, he seemed suitably chastened. According to Simon, the journalist said “this had been a lesson to him and that he would always have this experience in mind in discharging his responsibilities in future”.

Edward abdicated on 10 December 1936, four days after Grant sent his intercepted telegram.

The newly released files, all highly classified, have been gathering dust for decades in a Cabinet Office basement. Lord Wilson, a former cabinet secretary, described how he visited what he called a strongroom beneath his old office where he found “heaps of paper”.