Rod Stewart got engaged to model Penny Lancaster a few days ago, but his divorce from Rachel Hunter has not yet come through His fiancée Penny Lancaster is proudly showing off a £50,000 diamond engagement ring. But Rod Stewart's wife Rachel Hunter is thought to be setting her sights on a much bigger prize.

She is expected to demand a large chunk of the 60-year-old singer's £100million fortune when their divorce is finalised over the next few weeks.

The New Zealand-born model, who left Stewart after nine years of marriage, is said to be angry at his engagement.

Stewart, who has two children with Hunter, has always maintained that he would not marry again. But he announced his engagement last Friday after proposing to Lancaster, his girlfriend of five years, on a trip to Paris.

Hunter (35) is thought to have signed a pre-nuptial agreement before marrying Stewart in 1989. Legal experts say this would limit her to an initial settlement of around £5million.

But, under the law in California, where both have homes, she is entitled to claim half his fortune. With this in mind, she is expected to fight for more money in the final settlement.

"Rod knows that Rachel might try to get a large settlement from him and he has always been fearful of that but he now has no choice," a source close to Stewart said.

"She is generally not too happy with the way things have gone and it's possible she could make him pay out millions and millions of pounds. "Rod has not yet decided if he will sign a prenuptial agreement with Penny."