A DESPERATE search is on for billions of pounds in cash and assets stashed around the world by former Libyan dictator Muammar Gaddafi, who was killed on Thursday.

Dozens of Western banks and institutions are thought to hold the wealth, which the country’s new National Transitional Council government says is needed to help rebuild a shattered Libya which had suffered four decades of Gaddafi’s brutal rule.

Around £300 million in investments is thought to be held in one fund in the UK alone.

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The moves came as Nato Secretary General Anders Fogh Rasmussen last night said the alliance is to wind down its air operations in Libya and will withdraw on October 31.

After a meeting of Nato’s governing body, he said it had made a preliminary decision and that a formal announcement would be made next week.

The total assets plundered from Libya by the despot and his relatives are thought to run into tens of billions of pounds.

The London School of Economics also faces new calls to return £1.5m pledged to it by Gaddafi’s son Saif.

The race to secure the cash came as the UN called for an investigation into claims that Gaddafi was executed in custody.

The rebel government has claimed the dictator was killed in crossfire between pro and anti-Gaddafi fighters on Thursday.

But video footage emerged yesterday that appeared to show no signs of a battle and instead showed the blood-stained former leader pleading for his life as a rebel held a gun to his head.

Hundreds queued to see his body in a hastily constructed morgue to reassure themselves that he was finally dead.

Gaddafi’s burial has been delayed by differences among officials about what should be done with the body.

Under Islamic tradition burial of the body should have taken place as soon as possible.

But Libya’s oil minister said the remains may be kept “for a few days”.

The hunt also continued for his favoured son Saif, accused of atrocities during his father’s bloody reign, who had managed to flee the town of Sirte on Thursday.

The success of the rebel forces in Libya also triggered continuing unrest in other parts of the region, appearing to breathe new life into the Arab Spring, the pro-democracy movement which has swept the Middle East since the start of the year.

But the country’s new government faces a long and difficult search to recoup the money hidden abroad during the Gaddafi years.

Experts fear that many of the assets will be extremely hard to trace and then prove costly or impossible to seize.

They say that despite being recognised as the country’s legitimate government, the rebels could also face strong legal challenges as they attempt to recover the money.

Some estimates suggest that Gaddafi and his family controlled as much as £19 billion in assets in America alone.

These are thought to include secret bank accounts, investments funds, businesses and property held under assumed names or controlled by associates, and valuables such as art.

Billions of pounds worth of other Libyan assets were frozen by the international community at the start of the Nato bombing campaign

Bit by bit it has been released for use by the new Libyan government, which warned earlier this year that it was running dangerously low on money and a range of crucial supplies.

The wider Gaddafi family is thought to have placed money in countries as far apart as the United States, Britain, Italy, Switzerland, Malta and several African nations. One estimate of the family’s holdings in Italy included a 2%share in Fiat, the car giant, and a 15% share in the Tamoil energy company.

The family was also reported to have significant holdings in the football club Juventus, where Gaddafi’s son once sat on the board.

Pearson, the UK publishing giant which owns the Financial Times announced in March that, under legal advice, it had frozen a 3.27% stake held by the Libyan Investment Authority.