* Goal of ousting Assad as Syrian president remains
* Saudi officials concerned about threat of Islamist radicalism
* Interior Minister Prince Mohammed bin Nayef playing important role
By Angus McDowall
RIYADH, Feb 11 (Reuters) - After serving for years as the main conduit for weapons and cash to rebels battling Syria's Bashar al-Assad, Saudi Arabia is shifting its policy to contain the spread of Islamist militancy at home, diplomats and figures close to the goverment say.
Riyadh is concerned that radicalism among rebels in Syria will boost al Qaeda at home in Saudi Arabia, which suffered a blowback last decade when fighters from the network of Osama bin Laden - himself a Saudi - returned from jihad in Afghanistan.
Saudi leaders are still determined to help rebels bring down Assad, an ally of their main rival Iran, but their heightened focus on security at home suggests they may temper some of the effort.
In a striking sign of the change, King Abdullah last week issued a royal decree imposing prison terms of 3-20 years on Saudis who go abroad to fight.
The change has also come at a moment when Intelligence Chief Prince Bandar bin Sultan - the architect of a Syria policy that has included training camps in Jordan and shipments of weapons and money - has lowered his public profile, diplomatic sources in the Gulf say.
"Their Syria policy is getting very counter-terrorism focused," said a senior diplomatic source in the Gulf.
"The Interior Ministry in particular is very worried about what's happening in Syria, as they should be," he added.
Powerful Interior Minister Prince Mohammed bin Nayef led the crushing of an al Qaeda uprising in the kingdom in the last decade by Saudis who returned from wars in Afghanistan and Iraq. He later survived an assassination attempt by the group.
"What happened in Syria is really causing problems for us," said Abdulrahman al-Hadlaq, head of the Interior Ministry's Ideological Security Directorate, which monitors online radicalism.
He estimated there were between 1,000-2,000 Saudis in Syria, including both fighters and people distributing charity to refugees, and said he believed most were in groups aligned with al Qaeda.
Although Riyadh has discouraged its citizens from going to Syria, it was not until last week's royal decree that it made it explicitly illegal and clarified that those who did go faced tough penalties.
While the sources who spoke to Reuters for this report were not able to say with certainty in what way Riyadh will alter its systematic support for rebels under the policy engineered by Prince Bandar, they said senior figures in Riyadh increasingly worry that toppling Assad will take longer than they hoped.
Meanwhile, radical groups in Syria have been getting stronger at the expense of mainstream groups that have been the main recipients of Saudi military and financial aid, training and logistical support. Assad's position has also solidified in the past year.
The failure to build a rebel force that can defeat Assad is partly due to logistical difficulties in working with many disparate groups spread across the country, but it is also because the strongest rebel factions are linked to al Qaeda.
The change in emphasis could present an opportunity to realign Syria policy more closely with Washington, after Riyadh fell out with its superpower ally last year, accusing the administration of Barack Obama of foresaking Syria's rebels.
Obama is due to visit Saudi Arabia in March.
"The Saudis have to prepare a clear vision on what's happening in Syria and on what they want in Syria. Counter terrorism plays a big role in American thinking, and in Saudi thinking," said Mustafa Alani, an analyst with the Gulf Research Centre, based in Jeddah and Geneva.
Prince Mohammed, the interior minister, enjoys close relations with U.S. security officials, shares their concerns about Islamist militants, and met Central Intelligence Agency head John Brennan in Washington on Monday.
Riyadh and Washington argued last year over Syria after Obama decided against bombing Assad following a poison gas attack in Damascus, a decision Saudi leaders feared would encourage Iran to take a more open role in the conflict.
However, Saudi leaders still hope Washington will play a bigger role in supporting the Syrian opposition, particularly if the first peace talks between the government and its foes, which began last month in Geneva, fall through.
"They're trying to find a way back to a more joined-up approach with the U.S., U.K. and France. They have the same goal of preventing radical contagion and all want to see Assad gone," said the senior diplomatic source.
For now, the lower profile assumed by Bandar has complicated the war effort, say analysts.
"It's a problem. He was the man who was brought in for this task because it's a regional and international issue and he is good at this sort of dealing. His absence is unfortunate but his staff is still active," said Alani, who has close ties to the Saudi security establishment.
The kingdom's Syria policy is being carried out on several fronts, with a diplomatic effort led by Foreign Minister Prince Saud al-Faisal and a military training scheme for rebels under deputy defence minister Prince Salman bin Sultan.
But the wider effort to unite the rebels falls squarely in Prince Bandar's inbox, and has been hampered by disagreements among the rebels' main foreign backers over which groups are safe to support.
Diplomats say the Saudis believe Qatar - the other rich Gulf monarchy backing the rebels - has been willing to back more radical Islamist groups in Syria than the Saudis have been comfortable with, to Riyadh's chagrin. Western countries fear that even those Riyadh supports are too militant.
However, while the diplomatic and Saudi sources agree that the adjusted focus on Syria policy is due to Interior Minister Prince Mohammed pushing his concerns on radicalisation, it appears unlikely he will take a wider role in the war effort.
"He is careful not to overstretch himself and to involve himself in major external political issues unnecessarily," said Alani, pointing to the example of Interior Ministry involvement in Yemen, Saudi Arabia's southern neighbour.
In Yemen, the Interior Ministry runs operations aimed against al Qaeda, but it leaves broader issues of development and internal politics to other departments, he said. (Reporting By Angus McDowall; Additional reporting by William Maclean in Dubai; Editing by Peter Graff)
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