Congress has 45 days – until 29 June – to accept or reject the president’s recommendation. If accepted, the move will trigger the resumption of full diplomatic relations between the two nations for the first time in 27 years and the upgrade to embassy of the US liaison office in Tripoli.

State Department officials said the move was the result of years of careful diplomacy and followed a detailed review of Tripoli’s behaviour since 1993. Announcing the decision, US Assistant Secretary of State David Welch said it showed that when a state ‘adhered to international norms [it] will reap concrete benefits’. Secretary of State Condoleezza Rice said Washington’s actions came in recognition of Libya’s ‘continued commitment to its renunciation of terrorism’.

Sources in Washington said the move was a -‘carrot’ aimed at encouraging other regimes in the region to deliver democratic reform at a time when the US president is mired in difficulties in Iran and Iraq. ‘It is about the only carrot he has left to offer in the region,’ says one analyst. Others pointed out that with congressional elections due in November, obtaining congressional approval may not be a foregone conclusion. ‘Libya is no longer a big issue for the American people,’ says another analyst. ‘But if Congress feels it can score points off the president on this, it will do so.’

Diplomatic relations between the two countries were severed in 1980 following the ransacking of the US embassy in Tripoli by protesters and Libya’s designation as a state sponsor of terrorism. The US carried out air attacks on the capital in 1981 and 1986 and Tripoli was held responsible for the 1988 bombing of a Pan Am flight over Lockerbie, Scotland, which killed 270 people.

But the 30th anniversary in 1999 of Gaddafi coming to power saw a change of strategy by the Libyan leader when he accepted that in order to develop his country he must engage with the international community. The move saw Tripoli begin to address Washington’s terrorism concerns and, beginning in 2001, the US and the UK initiated three-way direct talks to secure Libya’s compliance with the remaining international terrorism requirements. In 2003, Tripoli accepted legal responsibility for the attack and has since paid compensation to relatives of the victims. Washington lifted many economic sanctions and restored some ties in 2004 after Libya renounced weapons of mass destruction. But arms exports were still banned and some oil investment was limited.