Al Qaeda's North African wing was paid a 3 million euros ($4.17 million) ransom for the release of Swiss hostage Werner Greiner, an Algerian newspaper said.

The money was transferred a few days ago and was handed to a Tuareg middleman in northern Niger, the Arabic language daily El Khabar added, quoting an unnamed security source.

Greiner was handed over to Malian authorities in the remote north on Saturday.

The source declined to say who had paid the ransom.

Greiner and British national Edwin Dyer were kidnapped on Jan. 22 near the Niger-Mali border. Two women with them were later freed but Dyer was killed last month after London refused to pay a ransom.

Algeria has been leading efforts to crack down on ransom payments which it says Al Qaeda in the Islamic Maghreb, the group which held Greiner and Dyer, uses to finance attacks on security forces inside Algeria.

"The West is a hypocrite. It wants to fight terrorism but it pays ransoms to free its hostages. This is not the best way to combat Al Qaeda," a senior security source told Reuters.