Kadhafi defiant as world frees Libya fund

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TRIPOLI: Muammar Kadhafi urged his supporters to fight on as world leaders freed up billions of dollars to help Libya's new rulers rebuild a nation torn by 42 years of one-man rule and six months of civil war.

"Let it be a long battle. We will fight from place to place, from town to town, from valley to valley, from mountain to mountain," Kadhafi said in a message relayed by satellite TV on the anniversary of the coup that brought him to power in 1969.

"If Libya goes up in flames, who will be able to govern it? Let it burn," he said, speaking from hiding.

In further comments broadcast later, he vowed to prevent oil exports, in the kind of threat that stirs fears of an Iraq-style insurgency: "You will not be able to pump oil for the sake of your own people. We will not allow this to happen," Kadhafi said. "Be ready for a war of gangs and urban warfare."

Amid conflicting reports of where the 69-year-old fugitive might be, a commander in the forces of the new ruling council said he had fled to a desert town south of the capital, one of several tribal bastions still holding out.

Seeking to avoid more bloodshed, opposition forces also extended by a week a deadline for Kadhafi’s hometown of Sirte, on the coast, to surrender.

Meeting the National Transitional Council in Paris at the invitation of France and Britain, prime backers of the Libyan uprising which followed other Arab Spring revolts, Western powers said Kadhafi was still a threat, but handed the NTC $15 billion of his foreign assets to start the job of rebuilding.

"We have committed to unblock funds from the Libya of the past to finance the development of the Libya of the future," French President Nicolas Sarkozy told a news conference.

Reports of Kadhafi’s son Khamis seen in the south of Tripoli in Salahuddin areas have been received, the rebels had claimed his death earlier.