Yesterday Dubai World, the financial arm of Sheikh Mohammed Bin Rashid Al-Maktoum, with US$ 59 billion of liabilities, said it would seek a six-month “standstill” before starting to repay its creditors.

The news threw banks and real estate companies in a panic around the world. Many of Dubai World’s creditors are not willing to stand still.

The Abu Dhabi Commercial Bank and Emirate NBD are among Dubai World’s major creditors.

Dubai borrowed US$ 80 billion in a four-year construction frenzy that transformed the beachside sheikhdom into a regional tourism and financial hub.

However, the world’s economic crisis led to the emirate’s steepest property slump, with home prices dropping 50 per cent, in some cases 70 per cent, from their 2008 peak.