The golden handshake: Brave step or a cynical ploy?

Tony Blair offered Muammar Gaddafi the "hand of friendship" in a desert tent outside Tripoli yesterday as he held historic talks with the Libyan leader aimed at ending the 20-year isolation of the pariah state and recruiting it as a partner in the war on terror.

Tony Blair offered Muammar Gaddafi the "hand of friendship" in a desert tent outside Tripoli yesterday as he held historic talks with the Libyan leader aimed at ending the 20-year isolation of the pariah state and recruiting it as a partner in the war on terror.

The Prime Minister praised Colonel Gaddafi as an example of international rehabilitation and praised his adoption of "a common cause" with the West in the fight against al-Qa'ida, extremism and terrorism.

In an attempt to stress the value of the rapprochement, British diplomats said the two countries were already sharing intelligence on North African groups linked to Osama Bin Laden. British businesses have also begun a rush to exploit Libyan oil and gas reserves potentially worth billions. The Anglo-Dutch energy giant Shell signed an agreement yesterday to invest $200m (£110m) searching for fuel reserves - and the aircraft and defence contractor BAE is hoping to land multimillion-pound deals to supply civil aviation equipment.

But the return of Libya to the international fold has, in some quarters, been criticised as a cynical stunt. Critics argue that Col Gaddafi's decision to give up his weapons of mass destruction is a welcome distraction from the continuing problems faced by the occupying forces in Iraq.

They also point out that the country's capacity and willingness to develop and deploy WMDs has been exaggerated to make the diplomatic breakthrough appear much more significant - and that Libya never posed much of a threat.

The Conservative leader, Michael Howard, said: "To give Colonel Gaddafi this huge propaganda coup and to call him courageous for giving up terrorism is quite extraordinary."

At his traditional encampment outside Tripoli, Mr Blair held two hours of talks with Col Gaddafi in a symbolic meeting designed to reward the leader for renouncing nuclear and chemical weapons programmes. He said Col Gaddafi had given "full and transparent co-operation" to weapons inspectors.

The meeting represented a remarkable rehabilitation for Col Gaddafi, once a global hate figure branded the "Mad Dog of the Middle East."

For decades, the North African state has been vilified for sponsoring terrorism. Libya was blamed for the killing of WPC Yvonne Fletcher outside the Libyan Embassy in London in 1984. Three years later, Libyan weapons bound for the IRA were intercepted on the arms ship the Eksund. The following year, the finger was again pointed at Libya after the downing of Pan Am flight 103 over Lockerbie in 1988.

Anti-terrorist officers from Scotland Yard are going to Libya to investigate the murder of police constable Yvonne Fletcher following the thaw in relations

Mr Blair's visit has attracted criticism from, among others, Amnesty International with attention being drawn to Libya's human rights record, including the disappearance of prisoners, use of the death penalty and intolerance of political activity.

The Prime Minister asp announced a new era of military co-operation with Libya. He appointed a senior British Army officer, General Robin Searby, as a defenceco-ordinator with Libya under an agreement to advise and train members of the Libyan army at Sandhurst.

In return, diplomatic sources said Britain was already gaining valuable intelligence from Libya about the activities of the Libyan Islamic Fighters, an offshoot of al-Qa'ida's global network. Senior officers from MI6 are also sharing intelligence with Col Gaddafi's regime about Islamic militants in the region.

The Prime Minister said the West had to respond to regimes that repudiated WMD and terrorism. "It was strange, given the history, to come here and do this and, of course, I am conscious of the pain of people who suffered as a result of terrorist actions in the past," he said.

"But the world is changing and we have got to do everything we can to tackle the security threat that faces us and that means getting after those people who are engaged in terrorism and destroying that threat by any means we can. But it also means that, if a country is prepared to say we are going to put the past behind us we want to give up chemical and nuclear weapons capability, we want to cease our ties with terrorist groups we should be willing to open up to that and give them the hand of partnership and show that, when they do that, they get a proper response - they get a relationship which is normalised. Times change and when they do change we should be prepared to change."

Downing Street made it clear that, whatever the differences, both governments opposed fundamentalism. A spokesman said: "What we agree on is the need to unite to recognise the problems posed to the world by fundamentalism."