The collapse of the Gaddafi regime will set back British trade links by a decade and slow down Libya's economic reconstruction, claim business leaders with ties to the country.
Although the businessmen do not condone the repressive regime, they do fear that it is inevitable that trade progress made since the turn of the millennium will be reversed. Libya started liberalising its economy in the late 1990s, and its return to the international fold was cemented when Tony Blair met Colonel Muammar Gaddafi in early 2004. Britain-Libya trade is now worth £1.5bn, of which the largest part is oil imported from the North African state.
Harry Legge-Bourke, director of specialist and heavy equipment provider Blaythorne, was leading a five-company consortium that was preparing to build a factory in Libya and has dealt with the country for nearly 10 years. He said: "It seems that there is going to be a power vacuum in the coming months. Companies had to deal with [Libyan] businesses that are from the Gaddafi tribal leadership.
"A number of companies, including us, will have to sit and wait to see who establish themselves, and then we're going to have to start from scratch, go back to square one. All our Libyan business contacts keep talking about the need to provide jobs and infrastructure for the people."
Oliver Miles, the former British ambassador to Libya who withdrew the British embassy from Tripoli following the 1984 shooting of PC Yvonne Fletcher, is now deputy chairman of the Libyan British Business Council.
He said: "If Gaddafi stays, there will be international sanctions which will mean that there is whole new ball game [in terms of trade links]. If he goes, there will be plenty of goodwill and Libya cannot trade as they've got nothing to eat. The problem is nobody knows what type of [trade and governmental] framework will be cobbled together."
US President Barack Obama has already announced sanctions against the regime, freezing the assets of Col Gaddafi and his four children. The Treasury has set up a special unit to trace and freeze the regime's estimated £20bn in the UK.
This seems likely to include the assets of the country's sovereign wealth fund, the Libyan Investment Authority (LIA), which has a number of high-profile property investments in London and a 3 per cent stake in the owner of the Financial Times, Pearson. However, FM Capital Partners, a Knightsbridge-based hedge fund, majority owned by the Libyan Africa Investment Portfolio, is believed to have been investing as normal over the past week.
The EU is also set to announce sanctions, including a travel ban and arms embargo, early next week. Libya was negotiating a free trade agreement with the economic bloc which was to be a stepping stone to joining the World Trade Organisation. A source close to these negotiations pointed out that the EU's motivation for a deal was to secure an alternative source of energy supply to Russia.
Despite the international pressure, the withdrawal of foreign workers and a UN estimate that at least 1,000 people were killed in the first 10 days of the revolt, figures around the Gaddafi family are telling British businesses existing contracts will be safe.
A UK businessman who spoke to his Libyan contact this weekend said: "He's ever positive, telling us everything will be fine. He's part of the clan and says that he gets the feeling the revolt will be short lived."
How the Libyans spend their money
Libyan Investment Authority
A $70bn sovereign wealth fund set up in 2006
The world's 12th biggest sovereign wealth fund
Wealth built on oil trade
Owns 2.6 per cent of Italian bank Unicredit
FM Capital Partners
London-based hedge fund set up in 2009
Run by former Bear Stearns trader Frederic Marino
55 per cent owned by Libyan Africa Investment Portfolio
Trains young Libyans in investment strategies