Documents retrieved by Human Rights Watch from Colonel Gaddafi’s former intelligence chief reveal embarrassingly close ties between the regime and western intelligence services.

The documents, found in the offices of Moussa Koussa, Gaddafi’s former right-hand man who has since defected, implicate the CIA in the rendition of suspects to the Libyan security forces, and suggest that MI6 gave the Gaddafi regime details of Libyan dissidents.

Koussa, Libya’s spy chief before he became Foreign Minister is suspected by human rights groups of involvement in the torture of Libyan prisoners; the British Government came under pressure to arrest him when he defected to the UK earlier this year. He has since moved to Qatar.

The files are believed to originate from a period of rapprochement between Gaddafi and the West, with Tony Blair instrumental in bringing the despot back into the international fold.

“We stumbled across a room containing the files,” said Peter Bouckaert, Director of Human Rights Watch. "These documents we found, their faxes start off 'Dear Moussa, thanks for the oranges you sent us, they were delicious'."

One document contains information on Blair's 2004 meeting with the now deposed leader, suggesting it was Downing Street’s idea to hold the conference. There is even evidence that MI6 drafted a political speech for Colonel Gaddafi during a period of cosying between the UK Government and the regime.

The findings, which have not been independently verified, will also make damning reading for the CIA, with claims that the US used Libya as a base for the rendition of prisoners, allowing the interrogation of suspects outside conventions on human rights.

"It wasn't just abducting suspected Islamic militants and handing them over to the Libyan intelligence," said Bouckaert. "The CIA also sent the questions they wanted Libyan intelligence to ask and, from the files, it's very clear they were present in some of the interrogations themselves."

Speaking on Sky News, British Foreign Secretary William Hague played down the findings, saying: “This is purely a matter for previous Labour Government. I have no knowledge of what was happening behind scenes. Also, we don’t comment on matters of intelligence… What we are focused on is helping Libya and getting recognition for the NTC... These are the big issues.”

Earlier today Mustafa Abdul Jalil, the chairman of the Nation Transitional Council, revealed that rebel forces now circle the last remaining Gaddafi strongholds of Bani Walid, Jufra, Sirte and the southern city of Sabha. The man hotly tipped to be Libya’s next leader also vowed to tackle the problem of institutional corruption in the beleaguered country.

Speaking to a press conference in Tripoli, Jalil said the NTC would announce to everyone the names of the people involved in unlawful activities.

“Their punishment will be severe,” he said. “I call upon all the free people of Libya to bring to our notice any financial corruption wherever it is. Additionally, it must be said that any official is responsible for his own decisions and will bare the responsibility for his bad decisions.”

Speaking on the standoff between the rebels and Gaddafi’s remaining forces, he said: “With God’s grace we are in a position of strength at the moment. Will can enter any city… but because of our desire to avoid bloodshed and to avoid more destruction of national institutions, we have given an extension period of one week.”

“This extension does not mean we are unaware of what Gaddafi accomplices are up to,” he said. "Our forces have moved militarily to surround these cities until the end of this period of extension. This is an opportunity for these cities to announce their peaceful joining of the revolution. We have commenced since yesterday to provide humanitarian aid to these cities and to connect them with communications and electricity and we are waiting for their reply in this regard.”

Following Jalil's announcement, there was confusion on the frontline, with some rebel troops eager to enter the areas that remain loyal to Gaddafi.

Within the address, the interim leader also confirmed that the National Transitional Council will move its headquarters from Benghazi to Tripoli on Wednesday.

In Libya, Gaddafi appears to be determined to carry on the battle.

"We will fight them everywhere," he reportedly said. "We will burn the ground under their feet ... Get ready to fight the occupation."

According to Reuters, the Chinese Government is obstructing the release of Libya's frozen assets.