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Dutch prince Friso, younger brother of King Willem-Alexander, died on Monday 18 months after he was left brain-damaged by an avalanche while skiing in Austria, the palace said.
"His Majesty the King announces with great regret that this morning his highness prince Johan Friso... died at the Huis ten Bosch Palace in The Hague, aged 44," a palace statement said.
"Prince Friso died from complications as a result of oxygen shortages during his ski accident on February 17, 2012," the statement said.
The prince had "minimal consciousness" and his condition was unchanged, the palace said.
Friso was injured while skiing off-piste in the Austrian Alps in February, 2012.
He was an experienced skier but nevertheless ventured off-piste with a friend while the avalanche risk warning was at four on a scale of one to five.
His friend was unhurt, but Friso spent around 20 minutes under the snow before rescuers pulled him out.
Friso was in July transferred from a hospital in London, where he lived, to the residence of his mother, former queen Beatrix, in The Hague.
Despite Friso's ill-health, his death came unexpectedly.
His wife Mabel tweeted just hours before the announcement her thanks for birthday messages, after she turned 45 on Sunday.
King Willem-Alexander, his Argentine-born wife Maxima and their three daughters broke off their holiday in Greece to return to the Netherlands, Dutch media reported.
State broadcaster NOS showed archive footage of the prince as a child and a young man after his death was announced, as tributes poured in.
Prime Minister Mark Rutte, who was to end his holiday early and return to the Netherlands on Tuesday, said that "despite everything this news still comes as a shock".
"Prince Friso remains in our minds as a man with broad interests who always put his multifaceted talents at society's service," Rutte said in a statement.
He sent his condolences to Friso's widow and children, as well as to his mother Beatrix.
"Losing a child is the worst thing that can happen to a parent," Rutte said.
Beatrix abdicated in favour of her eldest son Willem-Alexander on April 30, making her Princess Beatrix.
"The royal family warmly thanks all those who looked after for prince Friso for their outstanding and dedicated care," the statement said.
In 2004, prince Friso married Mabel Wisse Smit, giving up his claim to the throne as well as his Royal House position after it emerged that his future wife had withheld details of her previous relationship with a Dutch drug baron.
The prime minister at the time declined to ask parliamentary permission for them to marry, as required for royals under Dutch law.
At the time, prince Friso was fourth in line to the throne.
Allowed to keep his title as Prince of Orange-Nassau, Johan Friso nonetheless took the decision in good humour, having always referred to himself as a "reserve pretender to the throne".
The couple had two children.
It was not immediately known whether Friso would be buried in the Nieuwe Kerk in Delft, outside The Hague, where most members of the royal House of Orange are laid to rest.