Islamist militants have offered to free a British-South African hostage if London allows radical cleric Abu Qatada to choose a country for his extradition, US monitoring service SITE said.
Al-Qaeda in the Islamic Maghreb (AQIM) also threatened that Britain would "open the door of evil" unto its country and people should it send the imam back to his native Jordan where he faces jail, the report said.
AQIM -- Al-Qaeda's North African franchise -- has been holding Stephen Malcolm, 37, and two other Western men hostage since abducting them last November in the northern Mali desert city of Timbuktu.
Britain has been trying to deport Abu Qatada for more than six years, arguing he is a threat to national security, to Jordan, where the cleric was convicted in 1998 in absentia of involvement in terror attacks.
Videos of the cleric's sermons were found in the Hamburg flat used by some of the hijackers in the September 11, 2001 attacks, while he has also defended killing Jews and attacks on Americans.
The cleric's removal was blocked in January by the European Court of Human Rights, which cited the risk that evidence obtained from torture would be used against him on his return to Jordan.
Abu Qatada, who has been detained in Britain for most of the past decade on terrorism-related allegations, successfully appealed for bail following the ruling and was released under strict conditions in February.
Britain subsequently sought assurances from Jordan that would allay the European court's concerns, with Prime Minister David Cameron personally calling King Abdullah II and Home Secretary Theresa May visiting Jordan last month.
UK officials believe the high-level diplomacy cleared the way to deport the cleric, and he was re-arrested by immigration officials.
However, the European court is now considering another appeal by the cleric.
The SITE report said AQIM had offered a deal, "to release a hostage if the British government allows radical cleric Abu Qatada al-Filistini the opportunity to choose a country for his extradition".
The group had declared on jihadist forums on Sunday "that it has followed Abu Qatada's case for years, and that Britain will open the 'door of evil' unto its country and citizens should it extradite him to Jordan".
"The group said that it will release Stephen Malcolm, who has dual British and South African nationality, if Britain will extradite Abu Qatada to a country involved in the Arab Spring or to any country he chooses," SITE said.
Northern Mali in the vast Sahel region has been under the control of Islamists, including AQIM and Ansar Dine, as well as separatist Tuareg rebels, for more than a month.
The insurgents took advantage of the power vaccuum created by a March 22 army coup in the capital Bamako in the country's south, and the fabled desert city of Timbuktu is now in their hands.
The remote region has long been a haven for drug and arms smugglers as well as Islamist extremist groups, and has seen a spate of kidnappings in Mali as well as Algeria and Niger. AQIM is now holding 10 Western hostages.