MI5 has warned that Libyan expats are plotting terrorist attacks in Britain in revenge for bombing raids on Colonel Gaddafi's regime.

The threat was exposed after intelligence officers monitored hundreds of conversations between Libyans in the UK who have 'maintained connections with Tripoli'.

It raises the spectre of a new atrocity such as the 1988 Lockerbie bombing which was ordered by Gaddafi after U.S. air raids on his palace, launched from air bases in Britain in 1986.
© ReutersIntelligence officers monitored hundreds of conversations between Libyans based in the UK and Tripoli

students burning flag
© ReutersStudents burned a US flag during a demonstration against the bombing of Libya

MI5 sent a dossier to its allies on Friday just hours before the first bombs were dropped on Libya. It warns that Islamic extremists could be bankrolled as terrorists by wealthy and respected Libyan businessmen living in the UK.

One suspected plotter was overheard saying: 'Wherever we are, we'll do it. We have to fight. We must be dedicated to give support.'

Another talked of launching 'actions against neo-colonialism'.

The threats emerged as the commander of RAF raids over Libya declared that Gaddafi's airforce has been wiped out by four nights of allied air strikes.

Islamic extremists
© EPAIslamic extremists could be bankrolled as terrorists by businessmen living in the UK

Air Vice Marshal Greg Bagwell said Libyan air defences have been hit so hard that RAF fighters had yet to come under attack and are now operating 'with impunity' across Libya.

He said: 'We've blown up all their airplanes. Gaddafi's air force no longer exists. We have negated any air threat from his planes and surface-to-air missiles and, in effect, taken away his eyes and ears.

'And now we've destroyed his air force, we'll set about destroying his ground force that attacks civilians on the ground.'

The scale of the damage inflicted by the air strikes is so extensive that intelligence chiefs have told David Cameron that the dictator's top henchmen are now 'looking for a way out' and planning to go on the run.

Security sources said the GCHQ listening post in Cheltenham has picked up intelligence 'chatter' indicating that some close to the Gaddafi family have been making inquiries with African, Arab and South American countries about flying into exile.

U.S. Secretary of State Hillary Clinton also claimed that Gaddafi's closest allies are seeking to flee - and want to take the dictator with them.

Coaliton warplanes yesterday launched airstrikes against pro-Gaddafi forces slaughtering people in the rebel stronghold of Misrata.
bombed tank
© ReutersIn four nights of allied strikes Gaddafi forces have been dealt with severely and his air force has been wiped out

Fighter jets bombed tanks which had shelled the besieged city, where at least 45 people have been slaughtered including four children from the same family. But terrified locals said the killing was continuing.

Pro-Gaddafi snipers were shooting people from roof-tops. Sixteen civilians were reported to have been killed.

Doctors at the town's hospital said the situation was 'disastrous'.

Mr Cameron will host a summit next Tuesday to thrash out coalition plans for the future - with Nato still arguing last night over exactly what role the alliance will play in running the military operations.

Foreign ministers from those enforcing the no-fly zone will attend the talks in London.

Officials said the 'strategy for dealing with the Gaddafi regime' would be on the agenda.