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

Images of a blood-stained man thought to be Gaddafi being dragged through the streets 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.

Colonel Gaddafi’s death was announced by the prime minister of the country’s National Transitional Council (NTC), 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, Prime Minister 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, PC Yvonne Fletcher, who was gunned down outside the Libyan embassy in 1984, and those killed by the IRA using Semtex explosives supplied by Col Gaddafi.

The Prime Minister said he was proud of the role Britain played in helping the Libyan people liberate their country.

Speaking outside No 10 minutes after Mr Jibril confirmed Col 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 the news marked “a 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 Col Gaddafi died when he was shot in the head and legs after trying to flee Sirte in a convoy that was targeted by Nato warplanes.

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

There were reports that the 69-year-old may have been found cowering in a concrete pipe and begged not to be shot.

The Ministry of Defence confirmed that Nato warplanes attacked a convoy fleeing Sirte yesterday morning, though it is not known whether Col Gaddafi was in any of the vehicles.

“It was targeted on the basis that this was the last of the pro-Gaddafi forces fleeing Sirte,” a spokesman said.

RAF fighters were not involved in the attack, although RAF reconnaissance aircraft were in the area.

Britain has played a prominent role in the Nato-led international military effort to protect Libyan civilians under the terms of a UN resolution passed in March, following the outbreak of the uprising against Col Gaddafi the month before.

There were scenes of jubilation in Sirte, which had been under siege for the past two months as final pockets of Gaddafi loyalists held out against the NTC forces.

The end came in a couple of hours of fierce gun battles believed to have left many Gaddafi fighters dead, possibly including the head of the former regime’s armed forces, Abu Bakr Younus Jabr.

Col Gaddafi’s son and anointed heir, Saif al-Islam, was reported to have escaped Sirte into the desert. Mr Jibril said a convoy believed to be carrying Saif had come under attack from NTC forces.

In London, Libyan expatriates gathered outside their country’s embassy to celebrate.

Labour leader Ed Miliband said: “I pay tribute to the Libyan people for standing up to the former regime and seeking to define their own democratic destiny. We should be proud of the support that our armed forces have given to that cause.

“Britain should stand ready to continue to help the National Transitional Council as it seeks to improve economic and social conditions, ensure order and prepare for elections.”

After years as an international pariah, Col Gaddafi was repatriated into the international community in 2004 after renouncing weapons of mass destruction the previous December.

The dictator’s decision came after a series of meetings with Tony Blair. The then-Prime Minister and Sedgefield MP met Col Gaddafi in a Bedouin tent pitched in the desert outside Tripoli.

As they shook hands, Mr Blair said there was real hope of a “new relationship” between Britain and Libya. People should not forget the past, he added, but they should move beyond it.

Britain’s uneasy relationship with Tripoli helped UK companies win several lucrative commercial contracts between 2004 and this year when the regime began to crumble.