Prince Charles, self-appointed champion of organic farming, has had his carrots rejected by Sainsbury's because they were found to be rotten.

The decision to turn down the vegetables, which Prince Charles sells under his Duchy Originals brand, emerged on the same day that figures revealed the Prince of Wales is investing more than ever in his organic farming and gardening enterprises.

Annual accounts published by Clarence House show the Prince received a record income of more than £14m in 2005-06 and that he spent 37 per cent more on his organic gardens - £41,000 in total.

But the business disagreement with Sainsbury's highlights a growing tension between organic farmers and supermarkets, which Prince Charles once accused of discriminating against "wibbly-wobbly" vegetables. Sainsbury's also rejected carrots supplied by the head of the Soil Association, Patrick Holden.

The supermarket was at pains yesterday to point out that the issue was not the shape of the vegetables but the fact that the royal crop was rotten because it had been kept in a cold storage centre since being harvested last year. A spokeswoman said: "They put the carrots in cold storage near their farms, where they suffered rapid deterioration and as a result we have had to reject the remainder of the crop." When asked to define "quality issue", she replied: "It was rot." She stressed that neither contract had been cancelled.

Mr Holden said his carrots were sent by truck from his farm in Wales to a packing plant in Peterborough. He said the "quality issues" were "at least in part caused by transport".

"The truth is, if you buy your carrots in Sainsbury's, they will only come from this one pack house in Peterborough," he said. "I haven't got anything in for Sainsbury's. My issue is that all supermarkets have adopted this policy of centralisation of supply." He said he and Prince Charles were "casualties" of the system.

Prince Charles's annual accounts show that his organic food business made a profit of £1.2m for charity, on sales of £46m.

Yesterday, royal advisers for the first time revealed the Prince's income tax bill. He paid £3.3m last year. They said the Duchess of Cornwall cost the taxpayer only £2,000 last year. The figure excludes the cost of security, estimated at £1m.