A 72-YEAR-OLD granny is having an incestuous affair with her own GRANDSON and the pair are set to have a BABY. Grey-haired Pearl Carter has shocked family and friends after beginning a bizarre relationship with her 26-year-old grandchild Phil Bailey.

Pearl, from Indiana, US, is now using her pension to pay $54,000 (£35,000) to a surrogate mother so they can have a child, say reports in New Idea magazine in New Zealand.

Pearl said: "I'm not interested in anyone else's opinion. I am in love with Phil and he's in love with me. Soon I'll be holding my son or daughter in my arms and Phil will be the proud dad."

Phil is the son of Pearl's daughter Lynette Bailey who the pensioner put up for adoption when she was just 18.

When Lynette died, Phil tracked down his long lost gran 46 years his senior and they started their strange relationship.

Pearl added: "From the first moment that I saw him, I knew we would never have a grandmother-grandson relationship. For the first time in years I felt sexually alive."

The pair spent their first week together shopping, bowling and eating out. During the second week, giggly on wine after a night out, Pearl decided she wasn't going to deny her feelings anymore.

Pearl said: "I called Phil into my bedroom, sat him on the bed, and then I leant over and kissed him.

"I expected rejection but instead he kissed me back."

Phil said he had the same feelings towards Pearl.

He revealed: "I wanted to kiss her there and then. My feelings were overwhelming.

"I love Pearl with all my heart. I've always been attracted to older women and I think Pearl is gorgeous. Now I'm going to be a dad and I can't wait.

"Yes, we get laughed at and bullied when we go out and kiss in public but we don't care. You can't help who you fall for."

The pair have asked 30-year-old Roxanne Campbell to carry their child.

Pearl said: "I am finally going to be a mum and not forced to give up my child. Phil's going to be a great dad. I never in a million years thought at 72 I'd be 'pregnant' and in love with my grandson.

"I make no apologies and I believe God's given me a second chance."

Pearl says the relationship is not wrong after a friend told her about Genetic Sexual Attraction (GSA) syndrome, which occurs when close relatives meet as adults and find they are attracted to each other.

She said: "I could now understand my feelings and realise they weren't wrong."

Pearl was 18 when she fell pregnant with daughter Lynette. She was living with her Catholic parents in Indiana and they insisted she give the baby away.

They organised a private adoption and Pearl never saw her baby girl again.

Pearl went on to marry but she never had any more children. Instead she searched for her lost daughter until finally giving up hope 15 years ago.

Phil met Pearl for the first time in 2006 after tracking her down when Lynette died from brain cancer.