One of the most influential Saudi figures arrested in Crown Prince Mohammed bin Salman’s corruption purge has been released after reaching a reported $1bn (£750m) settlement, officials have said.

Miteb bin Abdullah was freed on Tuesday. While a figure was not disclosed the “acceptable” agreement was thought to be around the $1bn mark, sources close to the government told Reuters.

“It is understood that the settlement included admitting corruption involving known cases,” one official added.

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The freed prince is the son of the late King Abdullah and cousin of current Crown Prince Mohammed. He was once seen as a contender himself for the throne.

Before his arrest he was head of the elite national guard forces, a power base rooted in the kingdom’s tribes.

With his sacking Prince Miteb’s branch of the family have lost all their positions at the top of the Saudi power structure. His two brothers were removed from governor posts in 2015.

According to a Saudi official, Prince Miteb was accused of embezzlement, hiring ghost employees and awarding contracts to his own firms including a $10bn deal for walkie talkies and bulletproof military gear worth billions of Saudi riyals.

The claims could not be independently verified. Detailed allegations have not been released and it is not clear whether the 65-year-old will have freedom of movement or remain under house arrest.

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Prince Miteb was arrested along with 200 other royals, ministers and business tycoons in a huge corruption sting across the country on 4 November, and put under armed guard in the glitzy Riyadh hotel.

Their assets were seized, bank accounts frozen and private jets grounded.

It is expected that the majority of those detained will reach similar settlement deals with the kingdom’s absolute monarchy.

Prince Mohammed was promoted by his father King Salman as heir to the throne in June. In just five months the 32-year-old has made it clear he is intent on domestic reform, quickening the pace of social change by announcing new freedoms for women and a return to “moderate” Islam.

He is also acknowledged to be consolidating his power base with the arrests of religious figures and intellectuals in September and dozens of political and wealthy rivals earlier this month.

The state’s continuing human rights abuses – and its bloody intervention in the war in Yemen, under the auspices of Prince Mohammed in his role as defence minister – mean the declaration has been met with scepticism internationally.

At home, however, moves to streamline the Kingdom’s unwieldy bureaucratic organs and crack down on endemic corruption for the most part have been welcomed.

Riyadh, reliant on oil wealth for decades, is keen to diversify its revenue streams and open up to the modern world following a global plunge in oil prices.