Britain on Wednesday recognised Libya's rebel council as the country's sole legitimate government, after dramatically expelling all remaining staff loyal to Moamer Kadhafi from the London embassy.

Foreign Secretary William Hague said he had invited the National Transitional Council (NTC) to take over the embassy and appoint an official envoy to London in a major boost for the rebel movement fighting Kadhafi's regime.

"The prime minister and I have decided that the United Kingdom recognises and will deal with the National Transitional Council as the sole governmental authority in Libya," Hague said at the Foreign and Commonwealth Office.

"We are inviting the National Transitional Council to appoint a new Libyan diplomatic envoy to take over the Libyan embassy in London."

He added: "In line with that decision we summoned the Libyan charge d'affaires to the Foreign Office today and informed him that he and the other regime diplomats from the Kadhafi regime must leave the UK."

"We no longer recognise them as the representatives of the Libyan government."

Britain's move comes nearly two weeks after the Libya contact group, a group of major Western and regional powers, recognised the the NTC as Libya's legitimate government.

Britain is one of the lead nations in a NATO-led Western alliance that has been carrying out an aerial campaign against Kadhafi's regime since March, when the UN approved action to protect civilians.

On Monday Hague reiterated Britain's demands for Kadhafi to step down but said the Libyan leader may be allowed to remain in the North African country in an apparent shift in London's position.

Britain expelled the Libyan ambassador in May following attacks on the British embassy in Tripoli, and has also already kicked out several Libyan diplomats including the country's military attache.

It has no diplomatic representation in Tripoli but a Foreign Office special representative is based in the eastern rebel stronghold of Benghazi where the NTC is based.

"We will deal with the NTC on the same basis as other governments around the world," Hague said.

"We are dealing with them as if they are the state of Libya," he said.

"This decision reflects the National Transitional Council's increasing legitimacy, competence and successs in reaching out to Libyans across the country.

"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 through an inclusive political process.

"This is in stark contrast to Kadhafi whose brutality against the Libyan people has stripped him of all legitimacy."

Hague said the decision could also help with the unfreezing of some assets which have been frozen by the international community to stop Kadhafi profiting from them.

Hague was meanwhile scathing about the "pretty worthless" medical advice that allowed the freeing of convicted Lockerbie bomber Abdelbaset Ali Mohmet al-Megrahi, who appeared at a rally in support of Kadhafi on Tuesday.

Megrahi, 59, who has terminal cancer, was released from a Scottish jail on compassionate grounds in August 2009. He is the only man convicted over the 1988 bombing of Pan Am flight 103 which killed 270 people, mostly US nationals.