The Foreign Secretary William Hague yesterday moved to release millions of pounds worth of Libyan assets frozen in Britain to rebels in the east of the country fighting Colonel Gaddafi.
Mr Hague announced that Britain was to officially recognise the rebel National Transitional Council (NTC) as the "sole governmental authority" in Libya. As a result the remaining nine regime diplomats in Britain will be expelled and the Libyan embassy in Knightsbridge, west London, handed over to the NTC.
Mr Hague's decision also means that the UK will be able to offer greater practical assistance to the rebels, starting with the unfreezing of assets worth £91m belonging to the NTC-controlled Arabian Gulf Oil Company.
There was speculation that the money could be used to arm rebels fighting against Gaddafi's forces, and that once handed over it would be hard to control where it went. But British diplomats stressed it would be used for reconstruction, infrastructure and healthcare needs.
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," said Mr Hague.
"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."
- 1979 - Moussa Koussa, Colonel Gaddafi's security confidant, takes charge at Libya's UK embassy, establishing a revolutionary People's Bureau. He is expelled a year later.
- 1984 - Shots are fired from the Libyan embassy during an anti-regime rally. Yvonne Fletcher is shot dead in a burst of gunfire. After a 10-day siege, 30 Libyan diplomats leave the building and are deported. UK cuts diplomatic ties with Libya.
- 1988 - 259 people are killed in the Lockerbie bombing.
- 1991 - Scottish police charge Libyan officials, including Abdelbaset al-Megrahi with plotting the attack.
- 1999 - Britain reopens diplomatic channels with Libya.
- 2004 - Tony Blair shakes hands with Gaddafi.