Diana, then 26, chose to stay overnight at London's Great Ormond Street Hospital with the toddler while he was treated for the condition.
In an incredible act of motherly love, Diana insisted on sleeping on a mattress on the floor next to Harry's bed to be close to him, according to former friend Patti Boulaye.
'It was her decision to sleep next to him,' said Patti, describing how Diana had told her at the time hospital staff had given her the mattress so she could sleep beside her son.
'She must have been a mother and a half,' she added.
The princess was previously reported to have slept in a room next to her son, who underwent the surgery in May 1988 after being diagnosed with a minor hernia.
However, the new reports contradict this original claim.
Patti, now 63, who met Diana several times and went for lunch with the princess following the minor surgery, recalled how they discussed the prince's hospital trip.
Talking to MirrorOnline, Patti said: 'I said to her, I just joked - and I said, 'I'm so sorry how is [Harry], because you know, it was in the paper.' And she said, 'Oh, he's good', and she said, 'Oh, I'm so tired.' I said, 'Well, I bet you didn't have to stay in the hospital!''
Patti continued, 'She said, 'Oh gosh, I wouldn't let him stay there on his own.' I said, 'You stayed at the hospital?' She said, 'Yes.''
"And I said: 'So did I'. I said: 'But you didn't sleep on the floor?' She said: 'I did! They gave me a mattress', Patti concluded.
The popular singer made the revelation while MirrorOnline were conducting an interview with her regarding her long and successful career, and her new show, Billie and Me.