The U.N. Security Council late Thursday approved an immediate infusion of $1.5 billion that the United States seized last spring when the nations that aided Libya's rebellion release the cash needed by the NTC for the difficult task of rebuilding the country after six months of fighting.

With the fugitive Libyan dictator Muammar Al Qathafi still on the run, and with no hope of him returning to resume his leadership, the government-in-waiting in the country said the money was urgently needed to provide basic services, especially electricity, and to build political support for Libya's rebel leaders, known as the National Transitional Council, as they try to consolidate control of the country after 42 years of dictatorial rule.

The Al Qathafi regime has not paid salaries in months,, therefore money is needed badly. The members of the security council recongise the problem and after leading countries made new pledges of financial and diplomatic support, the UN decided to release $1.5 billion in frozen Al Qathafi assets. The Security Council's action so far affects only the $1.5 billion in U.S. jurisdiction.

Still, with so much uncertainty over the governance of Libya, none of the money will be given to the rebels but instead will go directly to pay for services and fuel costs.

The head of the National Transitional Council, Mustafa Abdel-Jalil, promised to reward those nations that backed Libya's revolt with contracts in the state's postwar reconstruction.

"We promise to favour the countries which helped us, especially in the development of Libya," he said in the rebels' eastern stronghold, Benghazi. "We will deal with them according to the support which they gave us."

The Libyan council has asked the United Nations to release as much as $5 billion of an estimated $160 billion in Libyan assets frozen abroad after the Security Council imposed sanctions on Al Qathafi's government shortly after the popular uprising began in February.

Much of those assets are property, investments or other fixed assets that cannot easily be cashed in without the authority of a recognised Libyan government, which legally remains very much up in the air. Of the nearly $38 billion in assets frozen by the United States, for example, only about $3 billion is in cash, according to the State Department.

The United States had asked the committee that oversees U.N. sanctions - made up of the same 15 members of the Security Council itself - for a special exception to return $1.5 billion but encountered

It faced strong opposition, particularly from South Africa. The sanctions committee requires unanimous consent, which South Africa blocked, even as events in Libya rapidly unfolded.

U.S. and British officials took the usual diplomatic step of publicly identifying South Africa's opposition and vowed to force a Thursday vote on a new resolution, which South Africa alone would have been unable to block.

South Africa objected to releasing the frozen money in part "because it implied recognition" of the rebels, one U.S. official said, but ultimately relented after the sanction committee's decision deleted explicit reference to the rebel council.

The $1.5 billion in assets is divided into three roughly equal parts of $500 million - none of which will go directly into the coffers of the rebels.

One-third will pay international organisations like the U.N. High Commission for Refugees for past and future humanitarian assistance, while another will go from U.S. accounts directly to companies that have been providing fuel for electricity in civilian areas under rebel control.

The third $500 million will go to a special fund in Qatar, controlled by a committee of nations, that disperses money for basic services like health care, education and food. Many countries, including Turkey most recently, have pledged money through the fund.

The transitional council, already recognised by the United States and many other countries as the authority in Libya, is scrambling on the diplomatic and political front to catch up to its surprisingly rapid military advances this week. it appeared to be succeeding, with the Arab League inviting the council to represent Libya at its next meeting later this month. It means formal recognition from the Arab League

The diplomats meeting in Istanbul - including representatives of the United Nations and the Arab League - promised in a statement to provide the council "the legal, political and financial means necessary to form an interim government of Libya."

They also called on the Security Council to free all the assets "in an expedited manner" and said that the United Nations would oversee "international efforts" to rebuild Libya, a demand that Russia and China emphasised Thursday.

The nations in Istanbul, meantime, pledged $2.5 billion in aid in all, according to Fathi Baja, a member of the rebel council. This will be a very useful chunk to take care of the immediate needs in the coutnry.

NTC head Mustafa Abdul Jalil said that "the biggest destabilising element" would be the failure of the rebel administration to deliver services and pay the salaries of officials who had not been paid for months. "Our priorities cannot be carried out by the government without having the necessary money immediately," he said.

With fighting still under way, it is too early to estimate the scope of the reconstruction needed in Libya, although officials acknowledged that the effort would be immense.

At the same time, officials said, much of it could be paid for by Libya itself from the Al Qathafi-era assets and a resumption of the country's oil industry, the infrastructure of which is not believed to have been badly damaged in the fighting.