Saudi Arabia’s ambitious young crown prince has said he will lead his country back to “moderate Islam” as he announced plans for a vast new £380 billion economic development zone.

Prince Mohammed bin Salman told investors gathered in Riyadh that his economic modernisation plans would go hand-in-hand with with political reforms to guide the conservative kingdom away from severe Wahhabi Islam.

"We are returning to what we were before - a country of moderate Islam that is open to all religions and to the world," the 32-year-old prince said.

"We will not spend the next 30 years of our lives dealing with destructive ideas. We will destroy them today," he added. "We will end extremism very soon."

The prince's pledge is a challenge to Saudi's conservative clerics and came as he announced plans for NEOM, a new economic zone that will stretch across Saudi’s borders into neighboring Egypt and Jordan.

The zone will be 26,500km square, making it bigger than Wales and significantly larger than neighbouring Middle Eastern states like Israel, Lebanon or Kuwait.