"William was told about the photos this morning. He's not impressed," a royal source told Us Weekly.
As for the rest of the royal family (including grandmother Queen Elizabeth, father Prince Charles and sister-in-law Kate Middleton), they're reportedly crossing their fingers that the scandal will blow over quickly.
"The Palace is just hoping no more images emerge," an insider told The Huffington Post. "As cheeky as these pictures are, they are just happy his crown jewels were not exposed … at least for now."
In two pictures, taken in a Las Vegas hotel suite and published by TMZ, a completely nude Harry is shown partying with two naked women (or possibly one woman photographed twice). One shot, taken during a game of strip billiards, shows the Prince's fully exposed rear end; the other, snapped from the front, shows Harry cupping his genitals with his hands. Both times, he seems unaware that he's being photographed.
The photos were reportedly taken on Friday, after Prince Harry and his "large entourage" invited a group of ladies from the hotel bar to party in his VIP suite. Buckingham Palace has confirmed that it is indeed Prince Harry in the photos, but made no other comment about the scandal. According to HuffPo, the pics could do serious damage to the royal family's reputation.