The Duke of Richmond's Goodwood Estate is being investigated for alleged false claims for grants.
The estate company may have to repay thousands of pounds to the Ministry of Agriculture, Fisheries and Food (MAFF).
The investigation was launched into claims for environmentally sensitive area grants, which pay for maintaining important wildlife habitats.
The estate, near Chichester, receives around £70,000 a year in grants.
But it is claimed that for seven years, the estate has listed land that is virtually flattened for the annual motoring Festival of Speed.
A spokesman for MAFF said an investigation had taken place and the results would be considered.
The allegations concern about 55 hectares used for the festival, which are not eligible for the grants.
There is no suggestion that the Duke or his son, Lord March, realised the estate was claiming money it was not entitled to. Spokesman Rob Widdows said: "The Ministry has indicated that the infringement may involve the repayment of grant aid."
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