LONDON - A ransom payment of up to US$1 billion (S$1.4 billion) to Iranian and al-Qaeda-linked forces in Syria to release members of the Gulf state's royal family who were kidnapped in Iraq while on a hunting trip is one of the triggers behind Gulf states' dramatic decision to cut ties with Doha, the Financial Times (FT) reported on Tuesday (June 6).

The newspaper said it was told by commanders of militant groups and government officials in the region that Doha spent the money in a transaction that secured the release of 26 members of a Qatari falconry party in southern Iraq , some of whom were members of Qatar's royal family.

Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed diplomatic relations with Qatar in a coordinated move on Monday. Yemen, Libya's eastern-based government and the Maldives joined later and transport links were shut down.

SPA, a Saudi state news agency, said that the kingdom cut ties because Qatar "embraces multiple terrorist and sectarian groups aimed at disturbing stability in the region, including the Muslim Brotherhood, ISIS (Islamic State in Iraq and Syria) and Al-Qaeda, and promotes the message and schemes of these groups through their media constantly", according to Reuters.

The ransom deal, which was concluded in April, heightened concerns among Qatar's neighbours about the small gas-rich state's role in a region plagued by conflict and bitter rivalries, said FT.

"The ransom payments are the straw that broke the camel's back," said one Gulf observer.

Doha denied it backs terrorist groups and dismissed the blockade by its neighbours as "founded on allegations that have no basis in fact".