* Had to stay in background for three decades
* Born into Welsh family in 1915
* Well liked figure in Swedish royal family (Adds quotes, prime minister's reaction, background)
STOCKHOLM, March 10 (Reuters) - The British-born Swedish princess whose secret 33-year romance with her royal husband became Sweden's best-known love story, died on Sunday at the age of 97, the court said.
Princess Lilian was the commoner wife of Prince Bertil, who died in 1997. They met and fell in love in London during World War Two, but had to keep their relationship secret for decades for the sake of the crown and to avoid a constitutional crisis.
"It is with sorrow that I have learnt that H.R.H. (Her Royal Highness) Princess Lilian is dead," Prime Minister Fredrik Reinfeldt said in a statement.
"A much loved and appreciated member of the royal family has now passed away," he added.
The royal court said in a statement that the princess, born Lillian Davies to a working class family in Swansea in August 1915, died peacefully in her sleep in the afternoon at her home in Stockholm. Local media said members of the royal family had managed to make their farewells to Lilian before she died.
Lilian, a divorcee, and Prince Bertil had to keep their love secret as Bertil's elder brother and heir to the throne, Prince Gustaf Adolf, had died in a plane crash in 1947 while the next brother, Sigvard, waived his right to the throne by marrying a commoner.
That left Bertil next in line until his infant nephew, Crown Prince Carl Gustaf came of age. If Prince Bertil had married a commoner he would have had to renounce his right to the throne, probably sparking a constitutional crisis.
It was not until after the crown prince became king in 1973, and married a few years later, that Prince Bertil and Lilian could finally get married themselves and appear in public.
The prince also had a house in the south of France and that was where the couple were most relaxed in the times before they could officially become a couple.
After Prince Bertil's death, Lilian carried out many ceremonial duties close to his heart, particularly those linked with sport. She wrote a book about their life together in 2000, including the pain she felt at not being able to accompany her partner on official duties. She dropped out of the public eye after the court said in 2010 that she had Alzheimer's disease.
In a black and white television interview from the time of the wedding, shown on the website of tabloid Aftonbladet, Prince Bertil said the main thing he regretted was that they had to wait so long to get married that they could not have children.
"That is something that is rather sad," he said, before turning to Lilian and adding: "After all, we are still very happy, aren't we?."
"Very, very happy" was Lilian's reply. (Reporting by Patrick Lannin; Editing by Stephen Powell)