Dubai World to pay back in full with interest - report

DUBAI, March 17 (Reuters) - Dubai World will offer banks one proposal in its attempt to renegotiate some $26 billion in debt, which would include full repayment over a seven-year period with interest likely linked to LIBOR, Al Arabiya reported on Wednesday.

Saudi-owned, Dubai-based broadcaster Al Arabiya quoted "informed banking sources" in the report posted on its website.

Officials from Dubai and neighbouring emirate Abu Dhabi have been working with restructuring experts to devise a viable debt restructuring plan acceptable to some 97 creditors to Dubai World, the indebted state-controlled holding company.

Dubai said in November it would ask creditors to delay repayment on $26 billion in debt linked to Dubai World [DBWLD.UL], sending shockwaves through markets.

A last-minute $10 billion bailout from wealthier Abu Dhabi helped Dubai avert an embarrassing default on an Islamic bond linked to developer Nakheel, builder of manmade islands in the shape of palms.

(Reporting by Raissa Kasolowsky and Rania Oteify; writing by Thomas Atkins)