London - The UK has received approval from the UN Sanctions Committee to release 1.86 billion Libyan dinar ($1.6bn) of banknotes, officials and news reports said.
The Libyan currency would "help address urgent humanitarian needs, instil confidence in the banking sector, pay salaries of key public sector workers and free up liquidity in the economy," Foreign Minister William Hague was quoted as saying late on Tuesday.
The banknotes were printed in Britain by De La Rue Plc, but then impounded in accordance with United Nations sanctions imposed on Libya.
The decision was "based on the remarkable progress in recent days," Hague was quoted as saying by the Press Association news agency.
On Thursday, the UN committee said the US could release $1.5bn in frozen Libyan accounts, money which is to be handed over to the rebels' Transitional National Council.
Germany and France have also asked for the UN's authorisation to unfreeze blocked assets held for Libya.