ancient ceremony yesterday as he witnessed the Masonic Lodge's annual peppercorn payment for the use of the State House.

Prince Edward arrived at King's Square in St. George's shortly before 11 a.m.

to the delight of the many locals and tourists who showed up to witness the ceremony which dates back to 1816.

"I haven't been for a long time,'' said Mrs. Eunice Alick of Devonshire. "I wanted to see the ceremony and of course, to see the Prince.'' Her friend, Mrs. Eileen Gibbons of Smith's Parish agreed: "I really wanted to come out and see him,'' she said. "This is the first time I've been to the ceremony in years.'' The 45-minute ceremony features the presentation of a tiny peppercorn on a silver plate atop a tiny cushion. The ritual began when Bermuda's capital was first moved from St. George's to Hamilton and the State House, the Island's oldest building, was taken over by the Masons.

A host of local dignitaries were also present for the event and spectators watched as Town crier, Mr. Bob Burns announced their arrival on the Town Square amidst the pomp and ceremony.

Lt. Col. Alan Rance, commanding officer of the Bermuda Regiment was the first to arrive on the square as the Regiment band performed.

Commissioner of Police Mr. Clive Donald arrived next followed by the members of the 195-year-old Freemasons' Lodge St. George's Number 200 who proudly marched onto the square.

Premier the Hon. Sir John and Lady Swan arrived next, followed by the Mayor of St. George's the Wor. Henry Hayward and his wife, Pat.

Governor Sir Desmond and Lady Langley's arrival preceded that of Prince Edward's in the official landaus.

With the Royal Standard flying in the breeze for the special occasion, onlookers applauded as the horse and carriage drove onto the square accompanied by members of the Police's motorcycle squad.

After the 28-year-old Prince's inspection of the guard of honour, guests were greeted by members of the Corporation of St. George's.

The crowd was then addressed by Mr. Hayward.

"The present recession has affected our finances and many capital works have been placed on hold,'' he said. "We will be putting our emphasis on places of interest and entertainment (in St. George's).'' Mr. Hayward acknowledged the first visit of a member of the Royal Family to the Peppercorn ceremony and thanked Sir Desmond and Lady Langley for the interest they have shown in the Old Towne during the past four years.

Sir Desmond gave recognition and praise to newly drafted members of the Bermuda Regiment and the Police Force for the expertise and efficiency with which they operate.

The entire ceremony was best summed up by Mr. and Mrs. Jeff Benton of Ohio: "Americans are fascinated by the Royal Family. It's the first time we've seen such a ceremony and we love the whole British atmosphere.'' The Prince was last night impressed himself by 31 recipients of the Duke of Edinburgh's Award Scheme in Bermuda.

After presenting three high school students -- Erika Black of Warwick Secondary and Saltus Grammar students Andre Raine and Randolph York -- with gold awards and, for the first time, 28 students with silver awards at Government House, Prince Edward had nothing but praises for them.

"I'm very pleased to see so many of you,'' he said. "I hope all of you enjoyed what you have done and you feel a sense of achievement. You have done something special by coming so far.

"When you walk out of this room, just walk a few inches taller. There are a lot of people who say, `oh the Duke of Edinburgh Scheme, I can do that'. But you all know you can.'' POMP AND CEREMONY -- The youngest son of the Queen and the Duke of Edinburgh, Prince Edward (centre), accompanies Governor Sir Desmond Langley, Premier the Hon. Sir John Swan, Deputy Premier the Hon. Ann Cartwright DeCouto, and a host of local dignitaries at the annual Peppercorn ceremony in St. George's yesterday.