Anti-Gaddafi fighters played a waiting game yesterday outside the besieged town of Bani Walid, as reports from Niger said prominent officials of the old regime had fled across the border.

They included Muammar Gaddafi’s internal security chief Mansour Daw, who was earlier reported to be in Bani Walid with at least two of the fallen strongman’s sons, a Tuareg source in Libya’s southern neighbour said.

China meanwhile denied a Canadian press report that it had offered masses of arms to Colonel Gaddafi during the final months of his regime and held secret talks on shipping them through Algeria and South Africa.Negotiations for the surrender of Bani Walid southeast of Tripoli broke down late on Sunday, Abdullah Kenshil, the chief negotiator for Libya’s new government, the National Transitional Council (NTC), said. But there were few signs that an assault was imminent yesterday, as fighters fretted about the fate of civilians inside the oasis town.

“We’re still awaiting the decision of the NTC,” operational commander Abdulrazzak Naduri told journalists at Shishan, north of Bani Walid. “They don’t want any more bloodshed.”

Mr Naduri said the Gaddafi loyalists, put at some 60 to 80 with no senior officers, were weak.

“But some of them are hiding in local families they are using as human shields. We’re afraid for the families in the town.”

Mr Kenshil said civilians were being held hostage in the centre of the town, in administrative buildings and in five or six nearby villages.

“Gaddafi’s soldiers have also closed the gates of the town and are not letting families leave,” he added. “That worries us, we don’t want to kill civilians in the attack.”

Local officials said most of the senior people had fled with Col Gaddafi’s most prominent son, Seif al-Islam, who according to Mr Naduri left a few days before for Sabha, further south, which is still in the hands of loyalists.

Two other sons of Col Gaddafi, Saadi and Mutassim, were also reported to be in Bani Walid.

Other Gaddafi loyalists who were not identified were said yesterday to be in the northern Niger town of Agadez, having been brought across the border by a top Tuareg leader allied to Col Gaddafi. Mr Kenshil said, however, that Gaddafi spokesman Mussa Ibrahim had remained in Bani Walid, adding: “We know where he is.”

Mr Kenshil said Col Gaddafi himself, his sons and much of his family had been in Bani Walid, without specifying when.

Saadi Gaddafi said the talks’ failure was the fault of his brother Seif al-Islam, who is wanted by the International Criminal Court along with their father for suspected crimes against humanity during the uprising. Saadi told CNN in a telephone interview that an “aggressive” speech broadcast by his brother a few days ago had led to the breakdown of the negotiations.

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