Muammar Gaddafi's regime has condemned the UK for recognising the rebel National Transitional Council (NTC) as the "sole governmental authority" in Libya.
Deputy foreign minister Khaled Kaim said the decision was "unprecedented in diplomatic history" and that he considered it "a stain on the forehead of Britain".
Mr Kaim told reporters: "It's illegal, it's irresponsible and for us it was a surprise to happen from the British Government because, I mean, if other countries will (follow) Britain, then the international diplomacy will be chaos."
The deputy foreign minister said Libya would try to reverse the decision by taking legal action in both British courts and the International Court of Justice.
Mr Kaim's comments came after Foreign Secretary William Hague announced Britain was recognising the NTC after similar moves by France and the US.
Mr Hague said the remaining regime diplomats in Britain would be expelled and the Libyan embassy in Knightsbridge, west London, handed over to the rebel council.
He added that the move would enable the UK to offer greater practical assistance to the rebels, starting with the unfreezing of assets worth £91 million belonging to the NTC-controlled Arabian Gulf Oil Company.
The decision to recognise the NTC follows an agreement by the international contact group on Libya, meeting in Istanbul on July 15, to deal with the NTC as the legitimate governing authority in the country.
"This decision reflects the National Transitional Council's increasing legitimacy, competence and success in reaching out to Libyans across the country," Mr Hague told a Foreign Office news conference yesterday.
"Through its actions, the National Transitional Council has shown its commitment to a more open and democratic Libya, something that it is working to achieve in an inclusive political process. I'm making this announcement to reflect the facts on the ground and to increase support for those fighting and working for a better future in Libya."