The European Union executive proposed launching talks on closer political and economic ties with Libya this year as part of a drive to boost relations with key energy suppliers.

A framework proposed by the European Commission includes provision for a free trade agreement and cooperation in areas including energy, control of illegal migration, transport, education, environment and culture.

"This is a historic decision. Libya is an important player in the Mediterranean region and in Africa," EU External Relations Commissioner Benita Ferrero-Waldner said. "I am confident that the agreement will create solid and long lasting relations," she said in a statement.

Trade Commissioner Peter Mandelson said the EU aimed for an "ambitious" free trade agreement. "Together with our support for Libya's bid to join the World Trade Organisation, these negotiations represent a vital first push forward in Libya's re-integration into the world trading system," he said in the statement.

EU ties with Libya were stalled for years over charges that the Libyan government supported terrorism. But Brussels announced in July it would boost relations after Tripoli freed Bulgarian medics accused of infecting Libyan children with HIV. In the deal struck to secure the liberation of the medics, the EU held out the prospect of increased market access for Libya in fisheries and agricultural products, as well as cooperation on migration and tourism.