The King is reportedly keen for Andrew to move to Frogmore Cottage, the smaller former home of Prince Harry and Meghan Markle.
Royal Lodge, meanwhile, is understood to be earmarked for Prince William and Kate.
After the King cut Andrew’s £250,000 annual subsidy, given him by the late Queen, the Duke is no longer able to afford the upkeep of the property.
A friend of Andrew’s told the Daily Mail that he was “refusing to budge” from the building, adding: “He is so fragile. He’s refusing to see anybody.
“This has been his family home for the past 20 years. Is it really sensible to kick him out?
“He’s concerned that now the Coronation is over, the knives are out. He’s worried that the Royals might even turn off the utilities to get him out of there. But we’re dealing with human beings, not real estate.”
Friends of the family also pointed to Eugenie’s coming baby as a point of concern for Andrew and Sarah.
They said: “Eugenie is heavily pregnant and her parents expect to have the new grandchild there this summer. Don’t forget that Sarah has been the glue holding the family together through this nightmare.”
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Andrew is reportedly pushing for negotiations over the future of Royal Lodge to be held between he and the King – rather than between officials, as is currently the case.
Friends of the Duke called on the new monarch to “do the decent thing” and “sit down and talk” with Andrew.
The Duke stepped down from royal duties due to his relationship with pedophile financier Jeffrey Epstein, as well as a disastrous Newsnight interview.
He brought criticism to the Firm last weekend when he appeared at the coronation in his full regalia, wearing the time-honoured Order of the Garter.