There is no authority to engage with in Libya, Foreign Secretary Philip Hammond said today.
He said there had been no progress on negotiations on the issues of reconciliation or compensation for victims of IRA terrorism sponsored by the Gaddafi regime.
The matter was raised by Democratic Unionist Nigel Dodds (Belfast North) in the Commons who asked for an update on the work of the advisers appointed by the prime minister.
Mr Hammond said: "I very much regret to have to tell you the reality on the ground in Libya is that there is no authority to engage with. For the moment I can report no progress on those measures.
"The urgent need now is to get a government of national unity created for the Libyan people to deal collectively with the threat to their society that is posed by the establishment of Isil cells in Libya.
"Once we have such an authority in place we will then of course re-engage with that agenda."
Conservative Sir Malcolm Rifkind, who announced he will be stepping down as an MP after the election following the cash for access scandal, also raised the issue of Libya.
Sir Malcolm, who denies any wrongdoing, was greeted by cheers of "hear, hear" when the Speaker called out his name.
He asked: " As the UK was one of the leading countries that helped the Libyan people overthrow Colonel Gaddafi, do we not have both a political obligation as well as a political interest to help all the democratic forces in Libya trying to create a new decent country?
"While I recognise the Government does indeed have a priority in that respect, can I urge you to ensure that the British Government does all within its power, perhaps even more than it is doing at the moment, over the crucial weeks and months that will determine whether Libya does indeed become a moderate secular force or whether it continues to be a hot bed of anarchy and potential terrorism."
Mr Hammond agreed the next few weeks and months would be crucial for the country, but said it was not as simple as getting behind the democratic forces.
He added: " It isn't clear there is a democratic authority behind which we can get. We need a coming together."
He said the UN secretary general's special envoy had enjoyed "some progress" and that the prime minister's envoy was also "working hard".
"We will continue to engage because it is absolutely vital to our security that there is a stable government in Libya," he added.