The Queen reportedly thought Harry and Meghan were naming their daughter Elizabeth – not Lilibet – and is said to have been surprised by their final choice.
Socialite and friend of the royals, Nicky Haslam, unveiled the revelation in a recent podcast, where he insisted the Sussexes should have named her Doria, after Meghan's mum.
Mr Haslam claimed the Queen had been under the pretence that the child, now one, would be called Elizabeth, and was later shocked to discover her nickname had been used instead.
He added: "I heard he [Harry] rang her and said: 'We want to call our daughter after you, Granny.'
"She said: 'How charming of you, thank you', thinking that it would be Elizabeth. So they got the permission, but they didn’t say the name."
The Queen was surprised at the couples name choice Jane Barlow
Lilibet celebrated her first birthday while visiting the UK for the Queen's Platinum Jubilee Celebrations Archewell
Appearing on The Third Act podcast, Mr Haslam went on to probe why Harry and Meghan didn’t name the baby after the American former actress’s mum instead.
He added: "Why on earth didn’t they call that baby Doria? It’s the prettiest name ever."
Lilibet has major sentimental connotations for the Queen because it was the name used in private for her by her father, George VI, and by her late husband, Prince Philip.
The comments follow an announcement earlier this week, which revealed Prince Charles and his wife Camilla finally met their granddaughter for the first time last month, when the couple travelled to the UK for the Queen's Platinum Jubilee.
News of the meeting ignited hopes of a reconciliation between Harry and his father after the Prince said Charles had been “trapped” in the institution of monarchy and had cut him off financially.
Prince Harry and Meghan Markle asked the Queen's permission prior to naming their daughter Yui Mok
The father and son have endured a rocky relationship in recent years, after the Duke of Sussex revealed he felt let down, stating how he had stopped taking his calls at one stage.
Harry and Meghan abandoned the Royal Family following an interview with Oprah Winfrey, where they accused an unnamed royal of demonstrating racist behaviour towards their son.
Despite the suppressed tension, a royal source told the Telegraph it had been "wonderful" to welcome the Sussexes back to the UK.
The source said: “It was fantastic to see them. It was wonderful to have them back in Britain.
“The Prince, of course, hasn’t seen his grandson Archie for a bit of time and so it was very, very, very special to have some time with him.
“He hadn’t met Lili, his granddaughter, and so to meet her was very emotional, a very, very wonderful thing.
“What grandparent wouldn't think that was a good day all round?”
The Duke and Duchess of Sussex travelled via private jet back to the UK earlier in the month, for the Queen's Platinum Jubilee celebrations.
The pair made their only public appearance of the trip at the Service of Thanksgiving at St Paul's Cathedral, but sat distanced from Charles, Camilla, and the Duke and Duchess of Cambridge.
In their first family trip to the UK since their departure to California in 2020, the couple were accompanied by their two children Archie, three, and Lilibet, one.
During their visit to the UK in June, the Queen reportedly met her great-granddaughter, although prohibited a photographer from capturing the moment.