Saif al-Islam Gaddafi said he was speaking from Tripoli's outskirts, and that his father was fine. "The resistance continues and victory is near," he said in an audio message.

Minutes earlier his brother, Saadi, said he had been authorised to negotiate with interim authorities to end the fighting in Libya.

Gaddafi loyalists have been issued an ultimatum to surrender before Saturday. Libya's interim leaders have made it clear they are not interested in negotiating.

Anti-Gaddafi commanders say they are moving to encircle the city of Sirte, Col Gaddafi's birthplace and one of the few areas of Libya still under the control of Gaddafi loyalists.

But in his message, Saif al-Islam warned against any such attack, saying there were 20,000 armed people ready to defend the city.

Transitional authorities received a boost on Wednesday when the UK announced that it was flying the first tranche of US$1.6billion in unfrozen assets to Libya.