While walking to St Mary Magdalene Church in Sandringham, adjacent to the royal family home in north Norfolk, 96-year-old Prince Philip, the Duke of Edinburgh, reportedly pointed at a bearded man and asked if he was a terrorist.
The Sun and the Daily Mail cited a witness, who claimed to have overheard the incident, as saying that "Philip was wishing lots of people a Happy New Year and then he spotted this guy with his distinctive beard."
"He pointed at him in a funny way and turned to one of his Royal bodyguards, saying: 'Is that a terrorist?'", the witness said.
The man, who was reportedly with his wife and children, "burst out laughing and appeared to find the whole thing hilarious," according to the newspapers.
Buckingham Palace declined to comment on the incident which took place as the Duke of Edinburgh marked New Year's Eve with the royal family in Sandringham. He resigned from his royal duties in August 2017.
Twitter users were quick to react to the news, with some of them warning against making fun of Prince Philip in connection with the incident.
Many, however, preferred not to mince words when criticizing the Duke of Edinburgh.