Oliver Holmes
January 24, 2012

BANI WALID, Libya (Reuters) – Libya’s ramshackle government lost control of a former stronghold of Muammar Gaddafi on Tuesday after local people staged an armed uprising, posing the gravest challenge yet to the country’s new rulers.

Elders in Bani Walid, where militias loyal to the ruling National Transitional Council (NTC) were driven out in a gunbattle a day earlier, said they were appointing their own local government and rejected any interference from the authorities in the capital Tripoli.

The town’s revolt will heighten doubts in the West about the NTC government’s ability to instil law and order crucial to rebuilding oil exports, to disarm tribal militias and guard Libyan borders in a region where al Qaeda is active.

Local elders denied reports that they were loyal to Gaddafi, who was captured and killed in October after weeks on the run, and Reuters reporters in Bani Walid saw no signs of the Gaddafi-era green flags which witnesses earlier said had been hoisted over the town.

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