iCloud drive not uploading files to iCloud from my macbook air - Big Sur 11.7.10.

Due to lack of space on my SDD I haven’t updated from Mojave to Big Sur until now (on my MacBook Air - late 2014). I bought a new SDD twice as big, used time machine, and did all available updates. Everything works great except for one single very important thing. Unfortunately Big Sur update has disabled files uploads to iCloud Drive. However, access to iCloud Drive still works, so files added from another device are visible. When a file is deleted on the affected computer (Big Sur), it is also deleted from iCloud. This issue has affects all users on this computer. Logging out and logging back into iCloud did not help, nor did creating a new user. Connecting to a different network did not help either. It doesn't matter the type of file, it won't upload anything (pages file, keynote files, numbers files), pdf, txt, jpg... nothing. The file has a "cloud symbol" in the iCloud drive folder and the finder says sending the item. I’ve tried all recommended solutions Ive found on internet, including using terminal to “killall bird” etc.

It may be an incompatibility between iCloud Drive and MacOS Big Sur 11.7.10? Everything else synchronises (notes, photos, mail, calendar, etc.). 

Has anyone experienced a similar issue and found a solution?

Thank you.