The organisers of a campaign to free Princess Latifa, who was captured three years ago trying to leave Dubai by her father, Sheikh Mohammed bin Rashid al-Maktoum, have disbanded it after the latest photograph of the princess out with friends emerged, and her cousin, the campaign’s co-founder, confirmed he had seen her looking happy and well.

A photo of Sheikha Latifa bint Mohammed al-Maktoum and her cousin, Marcus Essabri, in Iceland along with Sioned Taylor, a British woman who has previously appeared in pictures with Latifa, was posted on Taylor’s Instagram account on Monday. Latifa has not yet spoken publicly.

In a statement released by the Free Latifa campaign group, Essabri said: “I had an emotional reunion with my cousin Latifa in Iceland. I feel blessed that I got to spend time with her. It was reassuring to see her so happy, well and focused on her plans.”

The statement added that “the most appropriate step at this time” was to disband the organisation. “The primary purpose of the Free Latifa campaign was to see Latifa free leading the life she chooses for herself,” it said.

“We have clearly gone a long way towards achieving that goal over the last three years, with bodies such as the United Nations now monitoring the current and future wellbeing of Latifa.”

David Haigh, co-founder of the Free Latifa campaign, told the BBC that the princess was in “the best position she has been in, in terms of freedom … for two decades”.

But he added: “It’s quite right and understandable that everyone needs to look at everything that’s happening now with extreme caution and monitor the situation closely.”

Several images of Latifa have emerged in recent months. One appeared on Instagram in June showing Latifa posing with Taylor at Madrid airport, saying they were having a “Great European holiday”. Others showed Latifa at a shopping mall and a restaurant in Dubai.

In June, a statement issued in the name of Latifa declared she could now “travel where I want”. The remarks, released through her lawyers, were the first time that Latifa had been quoted since her dramatic failed escape from Dubai three years ago.

Eight days into a journey across the Indian Ocean, the boat Latifa was on was caught by commandos who forcibly removed the princess and returned her to Dubai.

Dubai’s ruler, Sheikh Mohammed, has come under international pressure to demonstrate that Latifa is free and well after she said her life was heavily controlled in a video released after her unsuccessful attempt to flee.

The princess, 35, is one the sheikh’s estimated 25 children by several wives. Sheikh Mohammed is the vice-president and prime minister of the United Arab Emirates, as well as being the hereditary ruler of Dubai, one of seven emirates that make up the country.