In a cloud of dust and rumours, Gaddafi loyalists flee the country

Rebel fighters pass a burnt-out car close to Misrata yesterday, as reports claimed Gaddafi loyalists were negotiating the handover of Bani Walid (EPA)

The convoy had snaked through the arid and unforgiving desert, up to 250 four-wheel drive cruisers and trucks heading across the Libyan border.

Soon tales began to emerge that they were laden with gold bullion and cash; gunmen and weapons and, the most elusive of prizes for the country's rebels, Muammar Gaddafi himself.

The reports began even before the cloud of sand and dust from the vehicles had disappeared into Niger. The fallen Libyan dictator and his son Saif al-Islam, it was said, had at last accepted defeat and were en route for exile in Burkina Faso, in a deal brokered by the French government.

At least some of the convoy had come from Sirte, the country's new administration, the Transitional National Council (TNC) held. Fathis Baja, an official, said that substantial amount of gold and cash had been ransacked from the Sirte branch of the Central Bank of Libya. "There were ten vehicles carrying gold, euros and dollars which crossed from Jufra into Niger."

Ali Tarhouni, deputy chairman of the TNC, said his government "accepted" the account of the large convoy although they were "not yet" certain Gaddafi was a passenger. Former regime's spokesman, Moussa Ibrahim, believed to be holed up in Bani Walid, denied Colonel Gaddafi had fled.

Burkina Faso has been the recipient of Gaddafi's largesse and it has said that it would welcome him "if he wishes it". The country, along with Niger, is a signatory to the International Criminal Court, which has issued arrest warrants for the former leader and Saif. But both also belong to the African Union, which has called on member countries to disregard the warrants.

Governments in France, Niger and Burkina Faso said they were unaware of the whereabouts of the former leader. The US government urged Niger to detain senior officials after the US ambassador to the country was informed that the convoy carried "a dozen or more" members of Gaddafi's government.

There has already been one confirmed move over by road into Niger using a desert corridor from Libya by Mansour Dhao, the head of Gaddafi's personal protection detachment and ten other senior officials, on Sunday. According to French military sources this was to prepare the way for the bigger convoy, in an operation co-ordinated by General Ali Khana, the head of the loyalist forces in the south.

Gaddafi and Saif, said a source, were due to join the yesterday's convoy on the way and move on to Burkina Faso.