LONDON (Reuters) - A cousin of Qatar's ruler lost his fight at London's High Court on Thursday against another branch of the Gulf nation's royal family over a 17th century diamond worth millions.

The dispute over the "Idol's Eye" diamond pitted art collector Sheikh Hamad bin Abdullah Al Thani, cousin of Qatar's ruler Sheikh Tamim bin Hamad Al Thani, against the relatives of former culture minister Sheikh Saud bin Mohammed Al Thani.

Sheikh Saud, Qatar's minister of culture between 1997 and 2005, was one of the world's most prolific art collectors and bought the 70-carat Idol's Eye diamond in the early 2000s.

He lent the diamond to QIPCO, whose chief executive is Sheikh Hamad bin Abdullah, shortly before his death in 2014.

The agreement gave QIPCO the option to buy the diamond with the consent of Elanus Holdings, a company linked to Sheikh Saud's relatives.

Elanus is ultimately owned by the Liechtenstein-based Al Thani Foundation, whose beneficiaries are Sheikh Saud's widow and three children.

QIPCO's lawyers say that a 2020 letter sent by the Al Thani Foundation's lawyer amounted to an agreement to sell the diamond for $10 million, but Elanus said the letter was sent by mistake.

QIPCO asked the High Court to order Elanus to sell the gem to it but Judge Simon Birt dismissed its case on Thursday.

QIPCO and lawyers representing Elanus did not immediately respond to a request for comment.

The two sides had disagreed over how much the gem is worth, with Elanus' lawyers saying in court filings that an expert had valued the diamond at around $27 million.

Birt said in his ruling that the diamond is "said to have been discovered in a mine at Golconda in Southern India, though that history is not complete or certain". He added that the gem is also said to have been owned at one point by Sultan Abdulhamid II, one of the last rulers of the Ottoman Empire.

(Reporting by Sam Tobin; Editing by Ros Russell)