The future princess quit as Party Pieces' project manager to 'concentrate full-time on preparing to become a member of the royal family,' the spokesman said.
She worked as a website designer and photographer for her parents' Party Pieces website.
Countdown: Prince William and Kate Middleton, who will be settling down to married life together after April 29
Royal aides confirmed she stepped down on Friday, one saying, 'She has handed over her work to colleagues and is now preparing for her future life.'
She is now dividing her time between her parents' home and Prince William's cottage on the island of Anglesey, North Wales, near the Royal Air Force base where the prince works as a search and rescue pilot.
The Queen is said to be keen for the couple to stay out of the spotlight for the first two years of their marriage, while William continues his career with the RAF.
Forebears: Princess Elizabeth and the Duke of Edinburgh leaving Westminster Abbey after their marriage ceremony.
It means he will see out his posting at RAF Valley, due to end in 2013.
A palace source said: 'The Queen knows there is enormous pressure when the heir to the throne marries.'
The young Princess Elizabeth herself moved into married quarters with Prince Philip in Malta where he was serving with the Royal Navy.
As the person in charge of marketing Party Pieces, Ms Middleton was responsible for projects such as putting together the Christmas catalogue, arranging photo shoots and attending trade fairs.
According to one friend, Kate, who helped organise parties in her former guise, has taken on the role of wedding planner with 'gusto and energy'.
The friend, who was quoted in Hello! magazine, said: 'Catherine is a naturally creative individual and has spent her professional life in the creative industries having worked at Jigsaw, then as a website designer, photographer, marketer and events organiser. Skills she has built up in her working life translate naturally to organising a wedding.
It's unclear whether Kate will return to work after the wedding, fuelling speculation that she and Prince William plan to start a family straight away.
It is expected that at some point she will switch to an official role as a charity patron, though none have yet been picked.
The royal couple are due to marry on April 29 at Westminster Abbey.
Setting: Westminster Abbey where the Archbishop of Canterbury will perform the ceremony
As preparations for the wedding continue, Miss Middleton is trying to keep the design of her wedding dress - and its creator - a secret.
Royal insiders say that while most of the big decisions have been taken, the couple will hold back on publicising some key details to keep them as surprises for the big day.
These include the identity of the dress designer, the design of their wedding rings and the words of their vows.
However, it was thought the princess-to-be would opt for an elegant, slimline dress.
The insider said:'They don’t want the world to be sick of their wedding before they become husband and wife. To them it is very important for people on the day to feel they are a part of something which is fresh and new.'
However, some key decisions have to be made. It is not clear whether Prince William will wear his RAF uniform for the wedding. His father Prince Charles and uncle Prince Andrew opted for military dress, as did his grandfather, the Duke of Edinburgh.
There is also uncertainty about where the couple will live after the prince finishes his training on Anglesey in 2013.
Some expect their London base to be St James’s Palace but insiders says Buckingham Palace and Kensington Palace have not been ruled out.
Miss Middleton has worked for her parents’ firm, which is run from a warehouse in Ashampstead Common, near their home in Bucklebury, Berks., since she gave up her job as an accessories buyer for the clothing store Jigsaw at the end of 2007.
They run a mail-order business selling cheap and cheerful accessories for children’s parties.
She controversially featured on its website last year as 'Kate from Party Pieces', reminiscing about childhood parties.
The posting, which featured a photograph of Miss Middleton, was removed from the website within days.
Following the fall-out from Miss Middleton’s appearance on the website, she was restricted to a backroom role.
Parents: Kate's father and mother, Michael and Carole Middlleton, outside their home at Bucklebury in Berkshire.
The family business, which was set up by Miss Middleton’s mother Carole and father Michael in 1987, was such an immediate success that it enabled the Middletons to send their three children - Kate, Pippa, and James – to Marlborough College, which now costs £29,000 per year.
They also financed gap years abroad and family holidays in the Caribbean. They even bought Kate a £780,000 flat in the heart of Chelsea.
Michael and Carole live in a £1million detached house in rolling countryside.
Family business: The website for Party Pieces, the mail order firm started by Kate's parents
Carole said she started Party Pieces ‘to inspire other mothers to create magical parties at home’ and to ‘make party organising a little easier’.
She rented a small commercial unit in Yattendon, four miles from the family home.
Yvonne Cowdrey, who did the family’s housework at the time, recalled: ‘Carole was fed up making up bags full of little gifts for the kids to take away from parties, and she realised other mums must feel the same. So she thought it would be a good idea to start a business that sold ready-made party bags.
‘She used to send out little catalogues with her children modelling some of the things they sold. I remember Pippa and Kate being in them, wearing T-shirts with their ages on them and holding cupcakes.’
Initially relying on catalogues, the business took off after Carole created a website. By 1995 the business moved into larger premises – converted farm buildings a mile down the road.
Eight staff now work in a 200-year-old barn, answering calls from customers and taking orders, while packers work in the ‘picking room’ – a converted cow shed – and ‘the warehouse’, a converted barn stacked with to the roof with themed tableware, decorations and party bags. ( dailymail.co.uk )
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