Dubai World will offer banks a single proposal to repay in full the $26 billion debt it is renegotiating, with interest likely linked to LIBOR, Al Arabiya reported on Wednesday.

Officials from Dubai and neighboring 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 state-controlled holding company.

Dubai World will propose to repay the debt over seven years, the Dubai-based broadcaster said on its website.

Implementing the proposal would cause banks to book losses this year due to the differences between the proposed rate and the rates in the original contracts, the report said.

Any interest losses should be declared in banks' financial statements this year, the broadcaster cited informed banking sources as saying.

Saudi-owned Al Arabiya also cited the sources as saying a problem had developed in the accounting process that could force Dubai World to review some minor technical, but not fundamental, aspects of repayment.

Dubai shocked the market in November when it said it would ask creditors to delay repayment on $26 billion in debt linked to Dubai World.

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 the artificial palm-shaped islands off Dubai.

The firm, which ringfenced key assets like ports operator DP World from the restructuring, has been in talks with a seven-member committee which represents the 97 creditors.

The panel is made up of Standard Chartered, HSBC, Lloyds, Royal Bank of Scotland, Emirates NBD and Abu Dhabi Commercial Bank, which are believed to have two-thirds of the total exposure.

A seventh lender, Bank of Tokyo-Mitsubishi, a unit of Mitsubishi UFJ Financial Group, joined the panel this year.

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

Dubai Al arabiya