DUBAI - A Saudi Arabian businessman whose family's commercial empire is involved in a multi-billion dollar debt dispute has been released from detention in the kingdom's Eastern Province, according to sources familiar with the matter.

Abdulaziz al-Sanea's release comes as the government steps up efforts to find a company to run a struggling 750-bed hospital owned by his family, a search that has turned the spotlight on the kingdom's effort to bring overseas investors into the healthcare sector.

Al-Sanea was freed late last week after being detained in October for unpaid debts, related at least in part to the hospital, according to the sources.

An arrest warrant, issued in October for his brother Mishal for the same reason, was also lifted, according to the same sources.

At the same time, the authorities approved a plan intended to restart operations at Saad Specialist Hospital in the city of Khobar in Eastern Province, which has been closed in recent weeks after being unable to pay staff and contractors, according to the sources. 

A special committee, formed by the government to find solutions for the hospital's future, concluded that the facility should be operated under the guidance of the Ministry of Health for seven years, the sources said.

The revenue would be deposited into the account of the court handling the liquidation of Saad Group, the family's company that owns the hospital, the sources added.

The Ministry of Justice did not respond to a Reuters request for comment.

London-listed NMC Healthcare NMC.L is among companies in talks with the government to take over the running of the hospital, one of the top cancer treatment facilities in the Gulf, Reuters reported on Thursday, citing sources familiar with the matter. 

Maan al-Sanea, the owner of Saad Group and the father of Abdulaziz and Mishal, is still in a civil detention centre in Khobar, according to the sources. He was also detained by authorities in October for unpaid debts.

Saad Group, which at its height employed about 12,000 staff and has interests in sectors spanning banking to healthcare, ran into difficulties in 2009 because of heavy debts, unleashing a series of long-running legal battles and a Saudi court-enforced liquidation of the company.

Reemas Group, a financial consultancy hired by Saad Group, last month outlined a proposed settlement covering $4 billion in debt under a plan to repay part of the money owed to creditors.

The legal action against the family is believed to be separate from a crackdown on corruption by Crown Prince Mohammed bin Salman in which dozens of Saudi princes and businessmen are being held.

The kingdom has released 23 of the 200-or-so powerful individuals detained since November on corruption charges after they reached deals with the government, Okaz newspaper reported on Tuesday.

(Reporting by Tom Arnold; Editing by Keith Weir) ((Tom.Arnold@thomsonreuters.com; +97144536265; Reuters Messaging: tom.arnold.thomsonreuters.com@reuters.net))