Powers boost Libya rebels, turn up pressure on Kadhafi

ISTANBUL (AFP) - Western and regional powers on Friday boosted Libyan rebels battling Moamer Kadhafi by designating them as the country's legitimate rulers, a move that gives them access to vital funds.

The fourth meeting of the Libya contact group in Istanbul saw a fresh call on Kadhafi to go after more than four decades in power.

With the colonel hanging on in Tripoli despite four months of NATO-led bombings, the rebels Friday stepped up an offensive on the oil town of Brega, hoping to dislodge loyalist troops and win a strategic victory.

In Istanbul, the contact group recognised the National Transitional Council (NTC), based in the rebel stronghold of Benghazi, as "the legitimate governing authority in Libya" until an interim government is formed, said a statement at the end of the talks.

Kadhafi "must leave power according to defined steps to be publicly announced," the statement said, calling for "the formation of an interim government to ensure a smooth and peaceful transition of power."

US Secretary of State Hillary Clinton, her counterparts William Hague of Britain, Alain Juppe of France and Franco Frattini of Italy as well as NATO secretary-general Anders Fogh Rasmussen were among officials from some 40 countries and international organisations who attended the talks.

Clinton said the TNC had offered "important assurances" to pursue democratic reform, uphold Libya's international obligations and disburse funds transparently.

"The United States is impressed by the progress the TNC has made in laying the groundwork for a successful transition... which reinforce our confidence that it is the appropriate interlocutor for us," she told reporters.

A number of countries have already unilaterally recognised the NTC.

The contact group's recognition "means that we can now unfreeze certain Libyan state assets because it is the NTC that will henceforth exercise this responsibility," Juppe told reporters.

An NTC official urged a mechanism that would allow it access to the assets, frozen under international sanctions targeting the regime.

"What we need most is funds, funds and funds ... We need three billion dollars," Mahmoud Shammam said.

The contact group "encouraged" members to prop up the NTC by enabling it to export oil, unfreezing assets or using restricted funds as guarantee for financial assistance, the final statement said.

It urged countries which have frozen Libyan assets under UN sanctions "to open credit lines to the NTC corresponding to 10 to 20 percent of the frozen assets by accepting them as collateral."

The statement also stressed "the leading role of the United Nations in facilitating dialogue" in Libya and urged "all actors to cooperate with the UN Special Envoy and coordinate with him their efforts."

Italian Foreign Minister Franco Frattini said the UN envoy, Abdel Ilah al-Khatib, would be "the sole interlocutor" between the regime and the rebels.

"Mr al-Khatib is entitled to present a political package including the ceasefire, and to negotiate with Tripoli and Benghazi to form a government of national unity," he said.

In an apparent rebuke to France, Frattini insisted that secret talks to end the conflict were "very counter-productive."

Paris acknowledged this week it had had "contacts" with the regime concerning Kadhafi's departure although it said no real negotiations had taken place.

Britain will deploy four extra strike aircraft to Libya to increase pressure on Tripoli in "response to the fact that Kadhafi continues to brutalize (his) people," spokesman Gavin Cook told AFP in Istanbul.

"We are putting four more Tornadoes in the theatre to do intelligence, surveillance, reconnaissance and they will also have a strike capability as well," he said.

The contact group includes the countries participating in the NATO-led campaign targeting Kadhafi's regime, as well as other regional players.

Mahmud Jibril, the NTC's de facto foreign minister, was also present in Istanbul.

Turkey invited Russia and China to join the meeting, but both countries, critical of the NATO-led campaign, turned down the offer.