Islamic charities from Saudi Arabia and the United Arab Emirates financed a network in U.S. ally Pakistan that recruited children as young as eight to wage holy war, a local newspaper reported on Sunday, citing Wikileaks.

A U.S. diplomatic cable published by WikiLeaks said financial support estimated at $100 million a year was making its way from those Gulf Arab states to a jihadist recruitment network in Pakistan's Punjab province, Dawn newspaper reported.

The November 2008 dispatch by Bryan Hunt, the then principal officer at the U.S. consulate in Lahore, was based on discussions with local government and non-governmental sources during trips to Punjab, Pakistan's most populous province.

It said those sources claimed that financial aid from Saudi and United Arab Emirates was coming from 'missionary' and 'Islamic charitable' organisations ostensibly with the direct support of those countries' governments.

Asked to respond to the report, Saudi foreign ministry spokesman Osama Nugali said: "Saudi Arabia issued a statement from day one that we are not going to comment on any WikiLeaks reports because Saudi Arabia is not responsible for these reports and we are not sure about their authenticity."

Saudi Arabia, the United States and Pakistan heavily supported the Afghan mujahideen against Soviet occupation troops in the 1980s.

Militancy subsequently mushroomed in the region and militants moved to Pakistan's northwest tribal areas along the border with Afghanistan, seen as a global hub for militants.

Since then there has been a growing nexus between militant groups there and in Punjab. In recent years militants have been carrying out suicide bombings seemingly at will in Pakistan, despite military offensives against their strongholds.

The discovery that Osama bin Laden was living in a Pakistani town not far from Islamabad until he was killed by U.S. special forces earlier this month has severely damaged ties between Washington and Islamabad.

The United States wants Pakistan to be a more reliable partner in its war on militancy.

Children sent to training camps

But militancy is deeply rooted in Pakistan. In order to eradicate it, analysts say, the government must improve economic conditions to prevent militants from recruiting young men disillusioned with the state.

The network in Punjab reportedly exploited worsening poverty to indoctrinate children and ultimately send them to training camps, said the cable.

Saudi Arabia, home to the fundamentalist Wahhabi brand of Islam, is seen as funding some of Pakistan's hardline religious seminaries, or madrassas, which churn out young men eager for holy war, posing a threat to the stability of the region.

"At these madrassas, children are denied contact with the outside world and taught sectarian extremism, hatred for non-Muslims, and anti-Western/anti-Pakistan government philosophy," said the cable.

It described how 'families with multiple children' and 'severe financial difficulties' were being exploited and recruited, Dawn reported.

"The path following recruitment depends upon the age of the child involved. Younger children (between 8 and 12) seem to be favored," said the cable.

Teachers in seminaries would assess the inclination of children 'to engage in violence and acceptance of jihadi culture'.

"The initial success of establishing madrassas and mosques in these areas led to subsequent annual 'donations' to these same clerics, originating in Saudi Arabia and the United Arab Emirates," the cable stated.