Libya's parliament on Tuesday charged the interim prime minister with forming a new cabinet after the weak central government had earlier requested wider powers.
Abdullah al-Thani "has been confirmed as prime minister and charged with forming a new government" after replacing ousted premier Ali Zeidan on a temporary basis last month, MP Tahar al-Mokni told AFP.
A spokesman for the General National Congress, the country's highest political authority, had earlier said the government threatened to resign if it was not granted wider powers.
The interim government has struggled to impose order following the 2011 uprising that toppled Moamer Kadhafi and left much of the country under the de facto control of former rebels turned militiamen.
Last month the GNC ousted Zeidan after the military failed to prevent rebels from sending a tanker loaded with oil out from a blockaded port.
The ship was later captured by US forces and returned to Tripoli.
Zeidan was temporarily replaced by Thani, a former defence minister, whose government's mandate was renewable every two weeks.
Government spokesman Ahmed Lamin had earlier confirmed the cabinet had requested wider powers but denied it had threatened to resign.