The Government source said: “Harry has made it clear he wants the Obamas at the wedding, so it’s causing a lot of nervousness.
“Trump could react very badly if the Obamas get to a Royal wedding before he has had a chance to meet the Queen.
“Conversations are ongoing and ministers will eventually have to decide. If the PM lays down the law, Harry will just have to suck it up.”
Prince Harry and Barack Obama have not been shy about displaying their affection for each other with the pair being pictured together at the ginger royal’s Invictus Games in Toronto earlier this year.
The two were pictured sharing smiles as they sat next to each other during the event.
Harry also interviewed Mr Obama in September - the recording will be broadcast on BBC Radio 4 tomorrow.
In a display of friendship, the former president tweeted a congratulatory message to Prince Harry and his fiancee following their engagement announcement in November.
He posted: “Michelle and I are delighted to congratulate Prince Harry and Meghan Markle on their engagement. We wish you a lifetime of joy and happiness together.”
The message was retweeted by Michelle Obama - the former first lady was joined by Harry in October when the pair made a surprise visit to students at the Hyde Park Academy in Chicago as part of the inaugural Obama Summit.
Donald Trump has frequently displayed a distaste for his predecessor - the Republican firebrand launched attacks on Mr Obama during his presidency during a campaign that saw him clamour for a birth certificate to prove the then-president was of US origin.
Mr Obama also chose to side with fellow Democrat Hillary Clinton during last year’s presidential race, further enraging the billionaire.
Prince Harry and Meghan Markle both share a loathing for Mr Trump - the Suits star shared negative posts on social media during his 2016 election campaign.
The upcoming royal wedding is not a state occasion, therefore the Government is only allowed a consultative role in its organisation - the guest list is being drafted by Buckingham Palace.
Following Donald Trump’s sharing of videos from Britain First on Twitter, Theresa May condemned the move - this resulted in the Republican firebrand lashing out at the Prime Minister.
Mr Trump posted: “Theresa May, don’t focus on me, focus on the destructive Radical Islamic Terrorism that is taking place within the United Kingdom. We are doing just fine!”
Earlier this month, a senior US diplomat casts doubts over a Donald Trump visit to the UK following his war of words with Mrs May.
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