The guardsman is believed to have used fake documents to join the Army â where he was trained in marksmanship, grenade throwing and how to use a rocket launcher â and his scam was only uncovered after a car crash when police discovered he had numerous aliases.
The soldier, named only as Guardsman Kapinga, is from an African Commonwealth country and took part in the trooping of the colour in front of the royal family last month, according to The Sun.
He trained at Catterick Barracks in North Yorkshire before joining the elite Batallion Irish Guards last Autumn, where he adopted the traditional red tunic and bearskin hat worn by Palace guards and apparently took part in sentry duties.
A military source told The Sun: "This is a blunder of unparalleled proportions. For an illegal immigrant to gain membership of any Army regiment is unbelievable when you consider the potential damage an enemy could do there.
"But to be accepted into a Guards regiment, and therefore to have such close proximity to the monarch, is nothing short of a scandal."
Palace officials were said to be "extremely unhappy" when told of the error after Kapinga was arrested by Hampshire police following a car accident on Monday.
The Irish Guards, based in Windsor, are on a two-year tour of ceremonial duties. A source told The Sun: "This is incredibly embarrassing. Clearly the vetting procedure was not as thorough as it should have been."