MUAMMAR GADDAFI, who ruled Libya with an iron fist for 42 years, was killed yesterday as rebel troops overran the last pockets of loyalist resistance in his home-town Sirte.

Gruesome images of a blood-stained man thought to be Gaddafi being dragged through the streets of Sirte were shown on Libyan television. Some of the images suggested he was alive when captured.

Gaddafi’s death was announced by the Prime Minister of the country’s National Transitional Council (NTC) government Mahmoud Jibril, who told a press conference in the capital, Tripoli: “We have been waiting for this moment for a long time. Muammar Gaddafi has been killed.”

In London, David Cameron said it was a moment to remember his many victims, including those who died when Pan-Am flight 103 was blown up over Lockerbie in 1988, WPC Yvonne Fletcher, who was gunned down outside the Libyan embassy in 1984, and those killed by the IRA using Semtex explosives supplied by Gaddafi.

In a statement notably free of any hint of triumphalism, the Prime Minister said he was “proud” of the role Britain played in helping the Libyan people liberate their country.

The Ministry of Defence confirmed that Nato warplanes attacked a convoy fleeing Sirte yesterday morning , though it was not known whether Gaddafi was in any of the vehicles.

There were scenes of wild jubilation in Sirte, which had been under siege for the past two months as final pockets of Gaddafi loyalists held out against the NTC forces.

The end came in a couple of hours of fierce gun battles believed to have left many Gaddafi fighters dead, possibly including the head of the former regime’s armed forces, Abu Bakr Younus Jabr.

Gaddafi’s son and anointed heir Saif al-Islam was reported to have escaped Sirte into the desert. Mr Jibril said a convoy believed to be carrying Saif had come under attack from NTC forces.

Libyan Saleh Ben-Elhaj, 41, said the news would mean he and his family could be free.

The optician turned rebel fighter was shot in the face during the conflict.

He was flown to the UK for treatment at Fazakerley Hospital for treatment two weeks ago as part of a Government deal.

He said: “I feel very good, I am very excited.

“I have spoken to my family and some of my friends. They are very excited and very happy, they are going out to celebrate.

“It will be very good for our country, it is very good news for us. That is the end for him and his troops forever.

“We hoped from the first moments of the revolution that it would be the end of it, and it now is. Our future can now be lived in a free republic.”