MUAMMAR Gaddafi, who ruled Libya with an iron fist for 42 years, was killed today as rebel troops overran the last pockets of loyalist resistance in his home-town Sirte.

Gruesome images of a blood-stained man thought to be Gaddafi being dragged through the streets of Sirte were shown on Libyan television. Some of the images suggested he was alive when captured.

It is understood that his body was later moved to a mosque in the town of Misrata, scene of some of the fiercest fighting earlier in the rebellion which ousted him from power.

Gaddafi's death was announced by the Prime Minister of the country's National Transitional Council (NTC) government Mahmoud Jibril, who told a press conference in capital Tripoli: "We have been waiting for this moment for a long time. Muammar Gaddafi has been killed."

In London, David Cameron said it was a moment to remember his many victims, including those who died when Pan-Am flight 103 was blown up over Lockerbie in 1988, Wpc Yvonne Fletcher, who was gunned down outside the Libyan embassy in 1984, and those killed by the IRA using Semtex explosives supplied by Gaddafi In a statement notably free of any hint of triumphalism, the Prime Minister said he was proud of the role Britain played in helping the Libyan people liberate their country.

Speaking outside 10 Downing Street minutes after Mr Jibril confirmed Gaddafi's death, Mr Cameron said: "People in Libya today have an even greater chance, after this news, of building themselves a strong and democratic future.

"I'm proud of the role that Britain has played in helping them to bring that about and I pay tribute to the bravery of the Libyans who have helped to liberate their country.

"We will help them, we will work with them, and that is what I want to say today."

United Nations Secretary General Ban Ki-moon said today marked an historic transition for Libya and called on combatants on all sides to lay down their arms.

The European Union called for the NTC to pursue a broad-based reconciliation process which reaches out to all Libyans and enables a democratic, peaceful and transparent transition.

NTC officials said that Gaddafi died when he was shot in the head and legs after trying to flee Sirte in a convoy which was targeted by Nato warplanes.

However the precise details of how he met his death remained shrouded in uncertainty.

There were reports that the 69-year-old, who ruled Libya as his personal fiefdom for more than four decades, may have been found cowering in a concrete pipe and begged not to be shot when found by NTC troops.