Scotland Yard is to investigate the alleged role played by MI6 and British ministers in the rendition and torture of two Libyan dissidents, one of whom is now a leading figure in the post-Gaddafi government.
In 2004 Abdel Hakim Belhadj, also known as Abu Abd Allah Sadiq, claims he was abducted as he made his way from Beijing to the UK where he and his wife had hoped to be granted asylum.
Instead of arriving in Britain, he was handed over to US authorities and thrown in a secret American prison, where he was mistreated. He was then detained for six years in prisons in Libya where he claims he was interrogated by "foreign" agents, including some from the UK.
He later became a leading military commander in the Libyan rebel army and is now the commander of the Libya's military council.
Lawyers acting for Abdel Hakim Belhadj claim that documents uncovered following the collapse of the Gaddafi regime prove Britain's involvement in his rendition and torture.
According to lawyers, one is a letter from Sir Mark Allen, former director of counter-terrorism at MI6, to Moussa Koussa, head of Gaddafi's intelligence agency, dated 18 March, 2004.
In it, Sir Mark is said to pass on thanks for helping to arrange the-then prime minister Tony Blair's visit to Gaddafi, writing: "Most importantly, I congratulate you on the safe arrival of Abu Abd Allah Sadiq.
"This was the least we could do for you and for Libya to demonstrate the remarkable relationship we have built over the years. I am so glad. I was grateful to you for helping the officer we sent out last week."
Tony Blair has defended his decision to re-open diplomatic links with the Gaddafi in 2004, arguing it helped persuade Libya to stop sponsoring terrorism and give up its chemical weapons programme.
Law firm Leigh Day & Co had asked the police to investigate the British officials, members of the UK security services and ministers, who "appear to have acted jointly with US and Libyan agents, to conspire to seize and unlawfully render our clients to Libya and the Gaddafi regime, where they were detained and tortured for several years".
"Our clients specifically remember UK agents coming to question them whilst in detention in Tripoli," they add.
In another case, Sami al Saadi, another opponent of Colonel Gaddafi's regime has claimed he was rendered along with his wife and four young children to Libya by British security services.
In 2004 Al Saadi and his family were abducted in Hong Kong as they made their way to the UK. They were taken by Libyan security agents to Tripoli, where al Saadi was thrown in prison.
Al Saadi described how, during their rendition, he saw his young daughter lose consciousness and his wife "screaming as they were handcuffed". His children were aged 13, 11, nine and six at the time.
He also claims that documents discovered after the fall of the Gaddafi regime show British agents interrogated him while he was imprisoned in Libya.
The decision to launch a criminal investigation came after it emerged no British spies will be charged over their alleged complicity in the torture of two terror suspects.
MI5 and MI6 agents will not face charges over the ill-treatment and torture of UK resident Binyam Mohamed in Pakistan and another detainee at Bagram Air Base in Afghanistan, Director of Public Prosecutions Keir Starmer QC said.
Following the decision not to prosecute any British agents, Mohamed said there had been a "pattern of massive complicity" in criminality at the "highest levels".
Shami Chakrabarti, director of the civil rights group Liberty, said she welcomed the criminal investigation into Britain's suspected involvement with torture under the Gaddafi regime.
"But the criminal law is not the only way of correcting grave injustices in a great democracy," she said. "It is now even more important that the victims, security agencies and wider public benefit from a full and independent judicial inquiry into one of the worst scandals of recent memory."