Contact Group agrees new fund for Libya rebels

An International Contact Group meeting on Libya in Rome has agreed to set up a new multi-million-euro fund to aid rebels fighting Moamer Kadhafi's regime with the US and Europe promising to access the frozen assets of the Libyan leader.

Reuters/Jacquelyn Martin/Pool

The fund will be set up with donations and loans from the international community while the assets, estimated to be around 20 billion euros, will be used at a later date once a number of legal issues have been resolved.

The EU and the US have reportedly frozen a total of around 40 billion euros in Libyan overseas bank accounts, but Italian Foreign Minister Franco Frattini admitted the unblocking of these assets was "a very serious problem".

Frattini announced 170 million euros was already available to the rebels, far less than the two billion euros they had originally asked for. Italy and France will take turns managing the fund, which could be up and running within weeks according to French Foreign Minister Alain Juppé.

There was tight security at the meeting, which brought together representatives of 22 countries and six international organisations including Nato chief Anders Fogh Rasmussen and EU foreign policy chief Catherine Ashton.

It was the second meeting of the International Contact Group for Libya after an inaugural meeting in Qatar. Participants agreed to hold their next get-together in the United Arab Emirates in June.

The head of the opposition's National Transitional Council council Mahmud Jibril was also at the talks where rebel officials announced that Denmark, the Netherlands and Spain had agreed to recognise their authority, following the example of France, Italy, Qatar and Gambia.

The three countries all later denied formal recognition.