Britain ordered all Libyan diplomats late last night to leave the country and said it was officially recognising Libya's main opposition group as the legitimate government.
Foreign Secretary William Hague said the UK was unfreezing $150 million worth of Libyan oil assets to help the National Transitional Council, which it now regards as the "sole governmental authority".
"We will deal with the National Transitional Council on the same basis as other governments around the world," he told a press conference.
Earlier in the night, the Libyan charge d'affaires was summoned and told that all eight remaining diplomatic staff and their dependants had to get out of Britain within three days.
The ambassador, Omar Jelban, was kicked out in May.