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AL-HERDA, Egypt (Reuters) - Egyptian workers taken hostage in Libya this week over a financial dispute between Libyan contractors and their Egyptian partner have been freed, a relative of one of the hostages said.

The governor’s office in Kafr el-Sheikh, the Egyptian province the workers are from, confirmed their case had been “resolved”, following coordination with government ministries, without giving further details.

The 16 workers were seized four days ago in Tobruk, in eastern Libya, by unknown gunmen after Libyan contractors accused a business partner from the same Egyptian village as the kidnapped men of fleeing the country after he stole 100,000 Libyan dinars ($72,000).

The kidnapping had stoked concerns over the fate of thousands of Egyptians, most of them working as laborers, in Libya -- a country torn by lawlessness since Western-backed rebels toppled leader Muammar Gaddafi in 2011.

A brother of one of the hostages said the kidnappers freed the workers, some into the custody of local contractors who paid money on their behalf, while the rest signed undertakings to stay in Libya and work to settle the gunmen’s demands.

Residents of the small village which the kidnapped workers came from -- Al-Herda in the Nile Delta province of Kafr el-Sheikh -- earlier said that three of the hostages had escaped their captors but their whereabouts were not known.

Thousands of Egyptians, most driven by a lack of jobs, have sought work in Libya since 2011, risking their lives in a country where Islamist militants and militias largely rule.

One resident of the Egyptian village said his brother paid 7,000 Egyptian pounds ($390) to smugglers who helped him reach Libya through desert roads.

In 2015, Islamic State militants killed 20 Egyptian Christians who were kidnapped while working in Libya.