Libya pay-off for 'colonial mistakes'

Italy has agreed to pay Libya £2.75bn in compensation for its 30-year occupation of the country, which ended in 1943. Italian Prime Minister Silvio Berlusconi and Libyan leader Muammar Gadaffi signed a memorandum pledging a compensation package involving construction projects, student grants and pensions for Libyan soldiers who served with the Italians during the Second World War.

'It is a material and emotional recognition of the mistakes that our country has done to yours during the colonial era,' said Berlusconi. 'This agreement opens the path to further co-operation.'

In return, Italy wants Libya to crack down on the number of illegal migrants turning up on Italian shores. Italy will fund £275m worth of electronic monitoring devices on the Libyan coastline.