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Prince Albert II (search) acceded to the throne Tuesday of a 700-year-old dynasty, a bachelor prince coming into his own as a modern ruler who wants to clean up the image of this Riviera tax haven and has unblushingly acknowledged fathering a child.

After a lifetime in the shadow of his father Prince Rainier III (search), who died in April, Albert emerged as an assured leader in his first speech to his subjects, hours after a solemn Mass to mark his ascension to the throne.

Albert outlined plans to promote the banking industry in the principality and stressed that money laundering would not be tolerated.

"Money and virtue must be combined permanently," Albert told his subjects, thronged before him outside the royal palace, some sipping champagne. "Monaco has a vocation to embrace other cultures. Should this be forgotten the European and American origins of my family are there to remind us," he said.

Albert was proclaimed ruler of Monaco at a Mass in the cliff-top cathedral where his father and mother, Hollywood beauty Grace Kelly (search), are buried.

Albert knelt as a choir sang a traditional Monaco prayer asking God to protect the prince. For the first time, the white-robed singers invoked Albert's name instead of Rainier's.

"We praise God for our new prince of Monaco, whom we receive ... as a gift," said the archbishop of Monaco, Monsignor Bernard Barsi, during his homily.

Cries of "Long live Prince Albert" greeted the new ruler as he descended the cathedral's red-carpeted stairs after the service, flanked by his sisters, Princesses Caroline and Stephanie.

Then he slipped on sunglasses and headed off for more festivities, continuing late into the night with a fireworks display set to tunes by U2 and Pink Floyd.

A national holiday was declared Tuesday and red-and-white banners -- the national colors -- hung in the windows of the royal palace and shops.

Prince Albert Alexandre Louis Pierre, Marquis of Baux, bears a name that rings with royalty, but he is a sporty 47-year-old bobsled enthusiast who is concerned about the environment.

Long seen as shy and retiring, he has shown a more forthcoming side since his father's death. Last week, as the three-month mourning period for Rainier ended, Albert confirmed news reports that he fathered a child with an African-born Air France flight attendant.

In another surprise, the night before taking the throne Albert told France's TF1 television there may be others with paternity claims, though he didn't offer details.

Little Alexandre -- Albert's son with Nicole Coste -- will never be eligible for the throne, as Monaco's constitution excludes illegitimate children from the line of succession.

But Albert won fans for registering himself as the father soon after the baby's birth two years ago and then speaking frankly about what happened.

"He's been very noble about it," said Natalie Coke, a 40-year-old Monaco lawyer. Wearing a shimmery yellow dress and strands of pearls, she scampered up a staircase to snap photos of the prince. "Long live Prince Albert!" she cried.

Hundreds of Monegasques, decked out in finery and elaborate hats, packed the white stone Cathedral of the Immaculate Conception.

Later, in less formal attire, they gathered along the city's port for concerts and a soul-and-funk dance party expected to last late into the night.

Albert automatically took royal powers upon the death of his father but did not formally embrace his role as His Serene Highness until Tuesday. His accession to the throne is a two-step event, with another ceremony expected to draw heads of state on Nov. 19.

The change is enormous for Monegasques, who grew up with Rainier, the "builder prince" who transformed this posh outpost near Nice into a hub of high finance and a playground for the rich. Rainier ruled for 56 years.

The principality has just over 30,000 residents, but 130,000 banking clients worth $78 billion in combined deposits, according to the Monaco Banking Association.

However, it also remains on an OECD blacklist of "uncooperative tax havens" -- alongside places like Andorra, Liberia and Liechtenstein.

Albert is a bobsledder who took part in the last five Winter Olympics and has headed Monaco's Olympic Committee since 1994.

The prince's bachelorhood caused consternation for Rainier, who wanted to ensure the Grimaldi family line. Monaco finally ceded to Albert's single status, revising the constitution in 2002 to allow him to pass powers to his siblings and their children. Albert has nonetheless said he plans to marry one day and have a family.