Citing unnamed US officials and corporate documents, the newspaper said that Erik Prince, who came to live in the United Arab Emirates last year after his security business faced mounting legal problems in the United States, is using $529 million from the sheikdom to complete the mission.

The force is intended to conduct special operations missions inside and outside the country, defend oil pipelines and skyscrapers from terrorist attacks and put down internal revolts, the report said.

Such troops could be deployed if the Emirates faced unrest or were challenged by pro-democracy demonstrations in its crowded labor camps in the oil fields or democracy protests like those sweeping the Arab world this year, the paper noted.

The UAE's rulers also hope that the troops could blunt the regional aggression of Iran, the country's biggest foe, the report said.

Their training camp is located on a sprawling Emirati base called Zayed Military City, according to the report.

The first recruits include Colombians, along with South African and other foreign troops, who are trained by retired US soldiers and veterans of the German and British special operations units as well as the French Foreign Legion, the paper said.

Blackwater security guards were accused of killing 14 Iraqi civilians in 2007. Last month, a US appeals court reopened the prosecution of four of these former guards.

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