NEW YORK/WASHINGTON: WikiLeaks founder Julian Assange has lost a financial lifeline.

Since December bans by the world's major credit card networks, it has been difficult for supporters of the controversial whistleblower to send him donations. But this week, WikiLeaks gained a brief respite with the unwitting help of an Icelandic bank.

The window was quickly closed.

On Thursday, WikiLeaks payments provider DataCell said it could start processing donations to Assange's group again, circumventing a months-long ban by Visa and MasterCard.

An Icelandic bank called Valitor had agreed to accept payments processed by DataCell, but DataCell did not tell Valitor that those payments would include donations to WikiLeaks, the bank told Reuters on Friday.

"Valitor was not informed that DataCell would be conducting these activities when their business agreement was made," spokeswoman Jonina Ingvadottir told Reuters in an emailed statement on Friday.

She cited Visa and MasterCard's prohibition on the "service such as DataCell is offering WikiLeaks".

The world's two largest credit card processing networks were among several companies to cut off services to WikiLeaks late last year after the whistleblower organization made public a massive trove of secret U.S. diplomatic cables.

One person familiar with the matter told Reuters earlier on Friday that Valitor had blocked the Visa and MasterCard WikiLeaks donations and terminated its contract with DataCell.

Fewer than 100 donations were processed before Valitor blocked the payments, the person said.

Other media outlets this week reported that it was Visa Europe that discontinued the WikiLeaks donations, but DataCell told Reuters that Valitor discontinued all donations to WikiLeaks it had been accepting.

Funding woes

The failed Valitor partnership is the latest blow to Assange, who has struggled to gain funding since the major payments networks stopped processing payments to WikiLeaks.

The exact nature of his current finances is not fully known. The Wall Street Journal reported last year that Assange had drawn a salary of 66,000 Euros -- around $86,000 -- during 2010, and a German charity connected to a computer hacking community has said in the past that it provided financial support for WikiLeaks and Assange.

But the WikiLeaks founder, who is facing sexual misconduct charges in Sweden, has been running up what sources say are substantial legal bills.

He is trying to block a Swedish request for his extradition from Britain, but he can no longer afford to pay his lawyers all they are owed, two legal sources told Reuters. The sources confirmed to Reuters that Assange had recently split with Mark Stephens, a prominent London media law specialist who had been one of the WikiLeaks leader's two principal representatives in the extradition case.

The sources said that the principal issue in the dispute was that Assange was not paying his bills.

Assange is also struggling with other sources of income. An over-$1 million book deal is in limbo and may be about to collapse, a source close to him confirmed to Reuters. The problems with the book deal were first reported by the British press this week.

Now he is trying to cash in on public appearances. Last month, WikiLeaks used the website eBay to auction off eight seats at a private dinner with Assange and Slavoj Zizek, a radical academic from Slovenia. The initial asking price per ticket was 350 pounds ($575).

Earlier this month, Assange and Zizek appeared on stage in London at a public forum; tickets to the event cost 20 to 25 pounds per seat.

Online support

Other Assange loyalists are trying to help him get funding -- or at least to retaliate against those who withdraw it. The Internet vigilante group Anonymous temporarily shut down the public websites of both Visa and MasterCard in December after the companies began their embargo.

Visa and MasterCard send money from bank to bank around the world, on behalf of consumers, companies, governments and other organizations. But those organizations, including WikiLeaks and its processing partner, need bank partners.

DataCell founder Olaf Sigurvinsson confirmed that Valitor had terminated the contract with his company this week. He told Reuters that when he signed the contract with Valitor, "it was absolutely clear that we were going to continue our proposal to collect donations," including to WikiLeaks.

He said DataCell has filed a complaint over Valitor's actions to the financial supervisor in Iceland, and that it plans to file one to the European Union.

Visa Europe spokeswoman Amanda Kamin said in an email on Friday that "an acquirer briefly accepted payments on a merchant site linked to WikiLeaks." She said as soon as this came to Visa's attention, action was taken. Kamin did not elaborate further.

MasterCard said it has not changed its position on the WikiLeaks donation embargo.