LONDON (AFP) - The sound of gun salutes and pealing bells rang out over London as Prince William and his wife Kate announced Monday that their new baby princess will be called Charlotte Elizabeth Diana.

Britain had been on tenterhooks waiting to discover what names the Duke and Duchess of Cambridge would give their little princess, who was born on Saturday and is fourth in line to the throne.

The names were interpreted as a tribute to both sides of the family.

Charlotte had been the bookmakers' late favourite and is the feminine form of the name of William's father Prince Charles, the heir to the throne.

Elizabeth is the middle name of Kate's mother Carole - another feminine version of Charles - as well as being the name of the reigning British monarch, great-grandmother Queen Elizabeth II.

The queen, who has been on the throne since 1952 and is set to become Britain's longest-reigning sovereign in September, overtaking Queen Victoria, has yet to meet the latest addition to the little princess.

But the two may be introduced in the coming days when William and Kate travel to Anmer Hall, their secluded 10-bedroom mansion on the Queen's Sandringham estate in Norfolk, eastern England.

Most sentimental of all is perhaps the baby's third name, Diana.

It was the name of William's late mother, who struggled under the glare of celebrity and died aged 36 in a 1997 Paris car crash, prompting a global outpouring of grief.

Diana gave birth to William in the same hospital where Charlotte was born, and when Kate appeared on the steps to show off the little princess to the waiting photographers she was wearing a ring that was once Diana's.

"William's late mother was there in spirit, outside the hospital on Saturday, her oval sapphire and diamond engagement ring on the hand Kate used to adjust the sleeping baby's shawl," Alison Pearson noted in The Daily Telegraph newspaper.

"The Duke and Duchess of Cambridge are delighted to announce that they have named their daughter Charlotte Elizabeth Diana," said the brief statement from their official residence, Kensington Palace.

"The baby will be known as Her Royal Highness Princess Charlotte of Cambridge." Diana's brother Earl Charles Spencer, who memorably delivered the eulogy at her funeral, said they were "perfect names".

"My 2-year old Charlotte Diana will be thrilled at cousinly name-sharing. Is at an age where thinks world revolves around her!" he tweeted.

The name Charlotte, which is also the middle name of Kate's sister Pippa, has historic royal standing.

King George III's wife Queen Charlotte (1761-1818) was an amateur botanist who used her middle name instead of her first name Sophie. Their son King George IV named his only child Princess Charlotte but she died following childbirth at the age of 21 in 1817.

According to the Office for National Statistics, Charlotte was the 21st most popular name for girls in England and Wales in 2013.

The name announcement came an hour after gun salutes rang out in London to celebrate the birth.

Forty-one shots were fired from World War I-era field guns in Hyde Park after a military band played Stevie Wonder's hit Isn't She Lovely.

Artillery units at the Tower of London also fired a ceremonial 62-gun salute at the same time, with the boom reverberating across the River Thames.

The standard royal salute is 21 rounds and an extra 20 are fired from a royal park or residence.

At the Tower of London, a further 21 rounds are added to show the city's loyalty to the sovereign.

At London's Westminster Abbey, where William and Kate tied the knot in April 2011, a Cambridge Surprise Royal peal of bells was played to mark the birth.

The new baby is behind the Queen's eldest son Charles, 66, grandson William and great-grandson George in the line of succession.

Kate, 33, gave birth within three hours of being admitted to St Mary's Hospital in London on Saturday.

William, 32, was present for the birth and the princess weighed in at 3.7 kilos.

The prince is not due back at work as an air ambulance pilot until June 1.

The Royal Collection Trust has unveiled the official royal baby chinaware.

Hand-gilded with 22-carat gold, each piece bears the words "Celebrating our new royal baby" and is decorated with a lion and a unicorn.