A Libyan rebel stands by a shop window decorated with a portrait of Muammar Gaddafi with his son Saif al-Islam on his shoulders.

New York - The US and South Africa struck a deal on Thursday night to allow the release of $1.5 billion (R10.8 billion) in frozen Libya funds for humanitarian aid and other civilian needs, UN diplomats said.

They said the agreement would enable the funds to be released without a UN Security Council vote on a US draft resolution that Washington submitted to the council on Wednesday in response to South Africa blocking a US request to disburse the money in the UN Libya sanctions committee.

The deal late on Thursday night ended a stand-off in which South Africa was standing firm – and alone – in its refusal to support the release of the frozen Libyan assets.

The US, UK and other Western powers want to hand the money to the National Transitional Council (NTC) in Libya to enable it to begin paying the bills and running the country.

Earlier, the South African government had agreed to a proposal for about $500m in humanitarian aid to be released to international aid groups – under the auspices of the UN – for “emergency relief efforts”.

South Africa’s agreement on Thursday came after it had come under intense pressure over the past 48 hours to play ball at the UN, while Pretoria remained the lone voice in the organisation’s 15-member Security Council arguing against the release of funds to the NTC.

The US has been trying for more than two weeks to get the Security Council sanctions committee to unfreeze the US assets to pay for immediate humanitarian aid, but South Africa objected.

The office of British Prime Minister David Cameron said he had called President Jacob Zuma and the two men had agreed that Libya now had the opportunity for transition to a peaceful, democratic and inclusive government. They discussed how the international community should actively and urgently support this process, Cameron’s office said.

Earlier on Thursday, Zuma had pledged to support the release of $500m, and said African leaders meeting in Addis Ababa would discuss the unfreezing of additional assets.

British Defence Secretary Liam Fox said South Africa had to join others in siding with the Libyan people, and believed there would be “huge moral pressure” on Pretoria.

“They wanted the world at one point to stand with them against apartheid,” Fox told BBC radio. “I think they now need to stand with the Libyan people, help unfreeze their assets and allow their authorities to get access to the capital they need to rebuild the country.”

International Relations and Co-operation spokesman Clayson Monyela had said in Cape Town earlier on Thursday that South Africa would not support the move as “neither the UN, nor the AU have recognised the council as the official governing authority” in Libya.

“You can’t ask the UN (Libya sanctions committee) to release funds to a structure that is not recognised by the UN,” he said.

South Africa would take its cue from the AU on whether to recognise the NTC when the organisation’s Peace and Security Council met in Addis Ababa today.

Zuma arrived in the Ethiopian capital on Thursday and was to be accompanied at Friday’s meeting by State Security Minister Siyabonga Cwele.

“It is only after the AU has discussed (the issue) and pronounced (its position) that we can talk about the releasing or unfreezing of assets to whomever the AU says is the legitimate government in Libya at the moment,” Monyela said.

“The UN itself has not recognised this structure (the NTC), so whom are you releasing these funds to? Who is going to administer these funds? And who is going to be accountable for the funds?”

The government says it has held a “clear position” on the Libyan crisis since rebels took up arms against Muammar Gaddafi’s regime.

“The issue about where South Africa stands – in terms of who we support – is very clear. In all our pronouncements, we have said that the issue of who and how Libya is governed should be decided by the people of Libya.

“They are the ones who must decide who must govern them and how they must be governed. We are not going to be imposing leaders on sovereign countries – the people of those countries must decide that.”

In what is likely to be another unpopular foreign policy position – particularly among the rebels and countries directly involved in the Libyan conflict – the government has reiterated its stance that any discussions about the country’s future must include “elements” of the NTC and what remains of the Gaddafi regime.

Monyela stressed that South Africa viewed the AU’s roadmap as the best way forward for Libya.

The rebels rejected this plan when Zuma presented it to them in April. While Gaddafi accepted the AU proposals, which would have seen him retain power through a political transition, he later reneged on an agreed ceasefire, leaving Zuma with egg on his face.

“Our expectation would be that, with the imminent fall of the government of Colonel Gaddafi, you will then have an interim government or authority that will come into place… and which will then begin the process of drafting an interim constitution, leading to a referendum, leading to a free and fair democratic election,” Monyela said.

“And then you start the process of stabilising the country, nation-building, reconciliation, unity, reconstructing infrastructure and reviving the economy.

“And consistent with the AU roadmap, by the way, is that it would be an all-inclusive process. So you would have elements of the NTC as well as elements of the regime or government of Colonel Gaddafi to begin a process of nation-building.”

Monyela dismissed criticism of South Africa’s apparent U-turn after its initial support for UN Resolution 1973, which authorised military intervention to protect civilians against Gaddafi’s forces. - Pretoria News