French President Nicolas Sarkozy has called for camps to be set up in Egypt and Tunisia to hold people fleeing escalating violence in Libya between rebels and pro-Gaddafi forces.

Sarkozy said giant "humanitarian zones" complete with "schools for the children" could house perhaps hundreds of thousands of displaced persons.

"Humane and decent conditions" at sites which should be run by the United Nations are required to "manage immigration flows" as democratic revolutions sweep across North Africa, he said.

Sarkozy said the camps were the only way European leaders could guarantee themselves "peace of mind" in the face of a potentially huge upsurge of illegal migrants into southern Europe.

Sarkozy said the leaders of the 27 states had "reached agreement on the principle of humanitarian zones" which he sees being set up initially in Libya's neighbours, countries where veteran leaders have already been toppled this year.

The EU agreed on Friday to re-prioritise aid worth some four billion euros ($5.5 billion) over the next three years in exchange for accelerated reform in these countries.

Sarkozy said leaders would like to see the holding sites moved rapidly to Libya "to treat the question of tens of thousands of displaced persons."

"If we want these Arab revolts not to provoke fear, frankly, we need to speak about migratory flows," Sarkozy said.

"We are looking at 200,000 people displaced, between Egypt, Libya and Tunisia.

"If we don't handle their welcome, in humane and decent conditions, what will they be tempted to do: they won't have any choice but to cross the Mediterranean," he said.

Sarkozy said Europe should "participate in (their) financing and organisation."

Immigration from its former African colonies has long been a hot-button issue in France and  a poll for 'Le Parisien' newspaper today saw Sarkozy trail in voting intentions for next year's presidential race and far-right leader Marine Le Pen, known for her hard line on immigration, leading the way.

Sarkozy insisted that immigration "must be mastered on both sides" of the Mediterranean but that the camps were the only way European leaders could guarantee themselves "peace of mind."

In summit conclusions, leaders spoke about the need for international humanitarian aid organisations to have access to areas where help was required.