“More needs to be done since Saudi Arabia remains a critical financial support base for al-Qaida, the Taliban, LeT and other terrorist groups,” says a secret December 2009 paper signed by the US secretary of state. Her memo urged US diplomats to redouble their efforts to stop Gulf money reaching extremists in Pakistan and Afghanistan.

“Donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide,” she said.

Three other Arab countries are listed as sources of militant money: Qatar, Kuwait and the United Arab Emirates.

The cables highlight an often ignored factor in the Pakistani and Afghan conflicts: that the violence is partly bankrolled by rich, conservative donors across the Arabian Sea whose governments do little to stop them.

The problem is particularly acute in Saudi Arabia, where militants soliciting funds slip into the country disguised as holy pilgrims, set up front companies to launder funds and receive money from government-sanctioned charities.

One cable details how the Pakistani militant outfit Lashkar-e-Taiba, which carried out the 2008 Mumbai attacks, used a Saudi-based front company to fund its activities in 2005.

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