Saudi princes and businessman arrested on orders of Crown Prince Mohammed bin Salman are being strung up by their feet and beaten by American private security contractors, claims a news report published in DailyMail.

The group of the country's most powerful figures were arrested in a crackdown as many as three weeks ago, as he ordered the detention of at least 11 fellow princes and hundreds of businessmen and government officials over claims of corruption.

The news report said that detained individuals went through a rigorous 'interrogations', which were being carried out by American mercenaries, ?Blackwater?.

'They are beating them, torturing them, slapping them, insulting them. They want to break them down,' a source told DailyMail.com.

Prince Mohammed has reportedly bypassed the normal security forces in keeping the princes and other billionaires at the Ritz Carlton hotel in Riyadh.

'All the guards in charge are private security because MBS (Mohammed Bin Salman) doesn't want Saudi officers there who have been saluting those detainees all their lives,' said the source, who asked to remain anonymous.

'Outside the hotels where they are being detained you see the armored vehicles of the Saudi special forces. But inside, it's a private security company.

'They've transferred all the guys from Abu Dhabi. Now they are in charge of everything,' said the source.

The source said that Salman, often referred to by his initials MBS, is conducting some of the interrogations himself.

'When it's something big he asks them questions,' the source said.

'He speaks to them very nicely in the interrogation, and then he leaves the room, and the mercenaries go in. The prisoners are slapped, insulted, hung up, tortured.'

The source says the crown prince is desperate to assert his authority through fear and wants to uncover an alleged network of foreign officials who have taken bribes from Saudi princes.

The source said that the name 'Blackwater' is being circulated as providing the mercenaries.

The controversial private security company, however, no longer exists under that name and is now Academi.

A spokesperson for Constellis, Academi's parent company, denied the claims.

The spokesperson claims that it has no presence in Saudi Arabia and does not carry out interrogations.

'Constellis through Academi does not now or have we ever provided interrogative services,' they said.

'We do not provide security services in KSA (Kingdom of Saudi Arabia), we have no contact or connection with any government official or private party regarding this allegation.'

When asked if Academi workers were involved in any kind of violence during these interrogations, the spokesperson said: 'No. Academi has no presence in KSA. We do not have interrogators, nor do we provide any interrogators, advisors or other similar services.'

They added: 'Academi does not participate in interrogative services for any government or private customer. Academi has a zero tolerance policy for violence. We operate legally, morally, ethically and in compliance with local and US laws.'