Saudi Arabia on Monday rejected claims that its planned futuristic megacity known as NEOM will have different rules from the rest of the conservative kingdom and function like a "country within a country".

In an interview published last week by the UAE's The National newspaper, Andrew McEvoy, head of NEOM's tourism sector, was quoted as saying that residents of the $500 billion Red Sea project would be known as "Neomians" rather than Saudis and that alcohol -- long banned in Saudi Arabia -- could potentially be sold there.

"NEOM will be treated as a country within a country, with its own economic zone and its own authority. We need to make sure its laws and regulations match the ambitions of those we are trying to attract to work and live here," McEvoy said.

The company developing NEOM responded with a statement stressing the site was "absolutely subject to the sovereignty and systems of the Kingdom of Saudi Arabia", according to a report by the official Saudi Press Agency.

NEOM will be "subject to all rules that are applied to any part of the Kingdom of Saudi Arabia in terms of issues related to security, defence and border protection", the report said.

The report allowed, though, that NEOM "will enjoy some special regulations related to investment". 

NEOM is part of de facto ruler Crown Prince Mohammed bin Salman's Vision 2030 plan to diversify Saudi Arabia's oil-dependent economy.

It has been billed as a futuristic cityscape evocative of a sci-fi blockbuster -- with everything from flying taxis to robot-maids. 

It will operate under its own founding law that is still being formulated. 

A senior official told AFP last October that NEOM was on track to welcome its first businesses and residents by 2025. 

Officials say its population will eventually top one million people. 

In his interview with The National, McEvoy said NEOM's first tourist attractions would open in 2024, and that alcohol was "definitely not off the table". 

"We need to be competitive, and to do that, we have to match what competing destinations are offering," he said.