An Algerian regional governor who was kidnapped in the Sahara desert and then freed in neighbouring Libya was handed over to the Algerian authorities at a border post on Wednesday, officials said.

The governor was the most senior Algerian official to be abducted in decades and the incident raised new concerns that instability in Libya after the overthrow of Muammar Gaddafi was spilling beyond its borders into an already volatile region.

In the most detailed account of the kidnapping yet, Algerian Interior Minister Daho Ould Kablia said it stemmed from a local dispute and was not the work of al Qaeda's north African branch, which is active in Algeria and some neighbouring states.

The minister said Mohamed Laid Khelfi, governor of the Illizi region about 1,700 km south of the Algerian capital, was abducted while trying to mediate in a protest at Debdeb, a settlement on the Algerian-Libyan border.

Some people from Debdeb were jailed a month ago for involvement in arms trafficking, which was seen by the court as support for terrorism. There have been protests in Debdeb since then, the minister said in parliament.

The governor did not take the necessary (security) measures when he visited Debdeb. A group took advantage of that and kidnapped him. The abduction was meant to get those prisoners released ... The incident has nothing to do with terrorism.

He said the governor was freed after about 24 hours when a militia from the town of Zintan, in western Libya, intercepted his kidnappers. The kidnappers are now being held by the militia, he said.

The interior minister's account contradicted earlier assertions that the governor was held by fighters from al Qaeda's north African wing, al Qaeda in the Islamic Maghreb (AQIM).

Two Algerian security officials, who spoke on condition of anonymity, told Reuters that the protesters in Debdeb included relatives of Abdelhamid Abu Zeid, an AQIM field commander, and that after the governor was abducted they handed him over to AQIM fighters.

Security experts say the instability and lack of strong government in Libya since the fall of Gaddafi have provided AQIM with a source of weapons and a safe haven from which to mount attacks.

Officials in Libya's interim government are anxious to show their neighbours, and their Western backers, that they have their territory under control and are cracking down on insurgents and arms traffickers.

Colonel Naji al-Mahrouq, with the Libyan border guard, said that after the Algerian governor was freed on Tuesday he was met by Libyan Defence Minister Osama Al-Juwali near Ghadames, a Libyan town near the border with Algeria.

(Additional reporting by Ali Shuaib in Tripoli; Writing by Christian Lowe)