British and US intelligence cooperated closely with Libya, with prisoners being offered to Moamer Kadhafi's regime under the rendition programme, a report said Saturday citing files found in Tripoli.
British daily The Independent said the secret documents discovered in the office of former Libyan foreign minister Mussa Kussa also show that Britain passed details of exiled opponents to Kadhafi's spies.
The cache further shows that it was the office of former British prime minister Tony Blair that requested that a 2004 meeting with Kadhafi in Tripoli should take place in a Bedouin tent, the daily said.
There was no immediate reaction from British or US authorities to the report.
The paper said the documents would raise questions about the ties that Britain, in particular, and the United States forged with Kussa and the regime as the western powers tried to bring Libya out of isolation.
Kussa flew to Britain in March and defected, but despite being accused of rights violations was allowed to fly to Qatar the following month.
The Independent said the papers include letters and faxes to Kussa headed "Greetings from MI6" (Britain's foreign intelligence service) and a personal Christmas greeting signed by a senior British spy with the epithet "Your friend".
It also cites a US administration document, marked secret, saying that it was "in a position" to deliver a man named as Shaykh Musa, a member of the Al-Qaeda-linked Libyan Islamic Fighting Group, "to your physical custody."
"We respectfully request an expression of interest from your service regarding taking custody of Musa," it quotes the document as saying.
In a separate report the Wall Street Journal said files show strong cooperation between the CIA and Kadhafi's intelligence agencies, including shipping terror suspects to the North African country for interrogation.
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The Central Intelligence Agency, under the administration of then-president George W. Bush, brought terror suspects to Libya and suggested questions that Libyan interrogators should ask them, it said, citing documents found at the headquarters of Libya's External Security agency.
The CIA also moved to set up in 2004 "a permanent presence" in the country, the Journal said, according to a note from CIA top operative Stephen Kappes.
Secret CIA rendition flights transported dozens of terror suspects around the world following the 9/11 attacks, often for interrogation in third countries.
Meanwhile British intelligence in a letter dated April 16, 2004 informs a Libyan security agency that a Libyan opposition actvist had been freed from British detention, the Independent said.
A further document purportedly from MI6 seeks information about a suspect travelling on a Libyan passport, adding that it is a "sensitive operation".
The cache also shows that a statement given by Kadhafi announcing that his regime was giving up weapons of mass destruction in a bid to shed its pariah status was put together with the help of British officials.
A letter addressed to a Libyan official from British intelligence attached a "tidied up version of the language we agreed...", it said.
Meanwhile the Independent said a sizeable amount of the correspondence was devoted to preparations for Blair's landmark Tripoli visit, and showed that Kussa played a role as conduit with the premier's 10 Downing Street office.
In one, it said an MI6 officer wrote to Kussa saying: "No.10 are keen that the Prime Minister meet the leader in his tent. I don't know why the English are fascinated by tents. The plain fact is the journalists would love it."
Blair was duly pictured shaking hands with Kadhafi in a Bedouin tent.