RIYADH (AFP) - US officials are intervening in a Canadian lawsuit involving a former Saudi spymaster, documents show, a rare move in a complex legal battle that threatens to blow the lid on sensitive undercover work.

Dr Saad Aljabri, a former intelligence czar exiled in Canada, is embroiled in a bitter royal feud between ousted former crown prince Mohammed Nayef (MBN) and current de facto ruler Prince Mohammed Salman.

Dr Aljabri, long associated with covert Saudi-US counterterrorism operations, claimed last year in a sensational American lawsuit that in 2018, Prince Mohammed Salman sent a kill squad to assassinate him, while detaining two of his children.

In counter lawsuits in the United States and Canada, a slew of Saudi-owned companies accused Dr Aljabri of embezzling billions while working on covert operations under Prince Mohammed Nayef, his former patron who is in detention after being deposed as heir to the throne in a 2017 palace coup.

The legal drama exposes the power plays within the secretive royal family.

But court documents show Washington is also in a bind as it seeks to protect national security secrets without jettisoning long-time ally Aljabri, who needs to produce the evidence of his intelligence collaboration to shore up his defence.

Washington could invoke the "state secrets privilege", which would allow it to resist a court-ordered disclosure of sensitive information in the US, legal experts say.

But the US has no such direct influence over Canadian courts.

In a letter to Dr Aljabri's lawyer seen by Agence France-Presse, the US Justice Department's attorney urged him to "postpone all filings" before an Ontario court until Sept 30 to allow Washington time to consider measures to protect its interests.

"Matters involving foreign relations and national security of the United States... require 'delicate' and 'complex' judgments," government attorney Malcolm Ruby wrote in the letter dated June 29.

While Washington had "no position" on the case, it was concerned by "the protection of sensitive national security information", he added.

Spilling secrets

The letter was copied to Ms Elizabeth Richards, a counsel for Canada's Justice Department, "as a courtesy", suggesting that the US is quietly coordinating with its Canadian counterparts.

Ms Richards and Dr Aljabri's lawyer did not respond to AFP requests for comment. Mr Ruby redirected AFP's query to the US Justice Department, which declined to comment.

Mr Ruby's letter said Dr Aljabri's defence filings will automatically trigger provisions under "Section 38 of the Canada Evidence Act", forcing his lawyers to redact sensitive information.

Legal experts say this provision prevents the disclosure of sensitive information or documents without the consent of Canada's attorney-general or a court order.

"Canadian courts have never seen anything like this," said a Toronto-based lawyer familiar with the case, who asked to remain anonymous.

"While Section 38 might temporarily prevent the spilling of US national security secrets, it deprives Dr Aljabri from using evidence central to his defence," the lawyer told AFP.

The lawsuits are by multiple companies, including Sakab Saudi Holding, which court filings say was established by Prince Mohammed Nayef as part of a network of front companies to provide cover for clandestine US-Saudi counterterrorism operations.

In March, Sakab accused Dr Aljabri of embezzling US$3.47 billion (S$4.7 billion) while working at the Saudi Interior Ministry. It urged the Massachusetts court to freeze his US$29 million worth of Boston property assets.

This came after multiple Saudi-owned companies including Sakab sued Dr Aljabri in Canada on similar allegations. A Canadian court subsequently announced a worldwide freeze of Dr Aljabri's assets.

'Nasty royal feud'

Dr Aljabri says that for his innocence to be proved, the courts would need to probe Sakab's finances, including how they were used to fund programmes operated with the US' Central Intelligence Agency, National Security Agency and Defence Department.

In US court filings in April, the US Justice Department suggested that it was keen for an out-of-court settlement.

But there are no indications the Saudi leadership is willing to settle.

"Aljabri is trying to use these legal avenues because he is stuck," a source close to the Saudi leadership told AFP.

"This is a last-ditch effort that I don't think will work" despite the risk of exposing secrets that "will embarrass the US", he added.

In a statement to AFP earlier this month, an official in Riyadh said the "Saudi government is not involved" in the lawsuits.

On Sunday, Human Rights Watch (HRW) demanded the immediate release of Dr Aljabri's two adult children, Sarah and Omar.

They were sentenced last November to more than six and nine years in prison, respectively. But HRW said the case was brought "solely to create leverage against their father".

Denying any financial wrongdoing, an Aljabri source has dismissed the allegations as "blind vendetta".

Washington is "jumping through legal hoops to protect its national security interests", the source said, adding that the US would do better "brokering an out-of-court resolution to this nasty royal feud that entangled Dr Aljabri and his children".