Rebels fought their way into Muammar Gaddafi's heavily fortified compound tonight as Foreign Secretary William Hague said the Libyan dictator's regime was in its "death throes".
There were scenes of jubilation in the Libyan capital Tripoli, with rebel soldiers firing their guns in the air after reportedly breaking right through to the dictator's inner sanctum.
In the wake of fierce gun battles with forces loyal to the 69-year-old dictator, the rebel soldiers poured through the green gates of the Bab al-Aziziya complex which been heavily damaged by Nato airstrikes.
There was still no sign of Gaddafi himself or members of his immediate family, but there was speculation he may have been inside.
Television footage from inside the compound showed rebels kicking the face of a gold bust of Gaddafi's head, stealing his golf cart and looting the compound while shooting their guns in the air in celebration.
Rebels could also be seen hanging from the statue of an American aeroplane clenched inside a fist.
Mr Hague told Sky News: "This is not yet an ordered or secure situation in Tripoli or other parts of Libya. It's not over yet but we are in the death throes here of a despicable regime.
"There is a lesson here for others in the world that once a critical mass of people of a country set out to achieve change or bring democracy to their country, then attempts to repress that by violence will not permanently succeed."
Mr Hague told the BBC that the fall of the compound was an "important" moment.
"The symbolism of it apart from anything else is important," he said. "For anyone in Libya who thought the Gaddafi regime, that its writ still ran, that what Gaddafi's son was saying this morning was true - well they are really disabused of it when they can see what is happening at the compound there,
"So that is important. But equally of course we have all learned over the last five months not to place too much emphasis on any one development or one piece of news."
The dictator is understood to have lost control of 80% of the Libyan capital as his base was stormed by rebel fighters.
But claims that his 39-year-old son and heir apparent Saif al-Islam had been captured seemed premature when he arrived at Tripoli's loyalist-held Hotel Rixos to tell supporters that the regime's forces had "broken the backbone" of the rebel offensive.
Briton Tracey Costello, who lives in the Libyan capital, told the BBC: "Everyone is in their houses waiting to come out, we are celebrating indoors. It is frustrating.
"It is bad news about Saif al-Islam but, believe me, the Libyan people are 90% with the opposition."
Meanwhile, Gaddafi's eldest son Mohammed was also missing after reportedly breaking free from house arrest last night.
Today the Government moved to play down hopes of a quick resolution to the conflict but insisted Gaddafi's time was up.
Prime Minister David Cameron, despite criticism from Labour, returned to his family holiday in Cornwall, leaving Deputy Prime Minister Nick Clegg to chair a meeting of the National Security Council in London.
Speaking after the meeting, Mr Clegg insisted the reappearance of Saif did not represent "some great comeback" for the Gaddafi regime.
He said: "He is not roaming freely through Tripoli. He and the remaining pro-Gaddafi forces are now cornered, they are making their last stand, and it's only a matter of time before they are finally defeated. About that we are very confident indeed."
International Development Secretary Andrew Mitchell warned of a "bumpy ride" over the coming days, blaming confusion over Saif's apparent arrest on the "fog of warfare".
"There was a lot of confusion, there are quite long lines of communication involved," he told the BBC.
"It's inevitable in this situation, with the warfare going on as it is, that there will be some confusion."
He added: "This will be a bumpy ride, as the Prime Minister made clear in his statement yesterday.
"But if you look at the events over the past week or so it is clear that the Free Libya forces are doing well and now occupy very large parts of Libya."
In Brussels, the EU's foreign policy chief Baroness Ashton said it was preparing to unfreeze Libyan assets once the United Nations had given its approval.
She is to travel to New York on Friday to discuss releasing funds to Libya's transitional administration to ensure public sector workers were paid and the country's stores had sufficient supplies.
Last night, Mr Cameron and US President Barack Obama discussed the rapidly unfolding situation during a telephone conversation in which they called on Gaddafi to "relinquish power once and for all" and discussed plans for a "peaceful transition to democracy".Reuse content