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Since the military coup of 1 September led by Gaddafi's "Free Unionist Officers", the country has been run by civilian ministers.
But they were obliged to refer to the so-called Revolutionary Command Council on matters of state and twice threatened to resign.
Now the 28-year-old colonel has taken the title of prime minister and appointed four members of his council to his new 12-member Cabinet.
British bases forced to close
Last month Col Gaddafi thwarted an attempted coup by his Defence and Interior Ministers and took charge of the main ministries single-handedly.
Now he can delegate to ministers he feel he can trust.
An outspoken Arab nationalist, Col Gaddafi set about freeing Libya from what he regards as colonialism by ordering Britain to abandon its military bases in the country.
But in an exclusive interview with the Times newspaper, he denied that defence contracts with the West would be terminated and said Libya was still interested in buying nearly 200 British Chieftain tanks.
However he would not be drawn on whether they would be sent to the Egyptian border - along with 50 Mirage aircraft already ordered - to be used against Israel.
"Until now there has not been any decision that war is to be the only solution to the Middle East conflict," he said. "Therefore since this question has not arisen yet, there is no need to answer it."
Egypt's President Abdel Nasser has been a great influence on the new leader and he has already strengthened ties with his Arab neighbour.
He and his young followers have expressed his hope for a future where all Arab nations would be united under Islam.
Soon after the coup, he began a process of "Libyanisation" of commerce and industry. Non-Libyans were forced out of influential positions and even Latin characters were removed from street signs in the capital, Tripoli, and in Benghazi.
This has had a damaging effect on the economy with skilled expatriates forced to leave the country to look for work elsewhere.
However Libya's oil industry continues to thrive and she remains the fourth largest oil producer in the world.
Col Gaddafi made a name for himself as one of the world's most unpredictable and autocratic heads of state.
His vision of a socialist Islamic Libya led to the nationalisation of all businesses and expulsion of foreigners in his one-party state.
For decades Col Gaddafi tried to portray himself as leader of the Arab world, but after attempts to join forces with Egypt, Tunisia and Syria failed he took up a mission of uniting Africa.
He has supported a various militant groups including the IRA and the Palestine Liberation Organisation. Alleged Libyan involvement in attacks in Europe in 1986 led to US military strikes against Tripoli.
In 1988 Libya was isolated by much of the international community after the bombing of a Pan Am plane above the Scottish town of Lockerbie. But it formally accepted blame for the incident in August 2003.
The move, part of a deal to compensate families of the 270 victims, paved the way for the lifting of UN sanctions.
In December 2003, Libya announced it would abandon its attempts to develop weapons of mass destruction. The US restored full diplomatic relations with Libya in May 2006.
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