Germany recognises the rebel National Transitional Council as the "legitimate representative" of the Libyan people, German Foreign Minister Guido Westerwelle said on Monday.

"The NTC is the legitimate representative of the Libyan people," Westerwelle told reporters after meeting council officials, including the rebel "foreign minister" Ali al-Essawi.

"We want a free Libya, in peace and democracy without (Muammar) Gaddafi," he said in the rebels' eastern bastion of Benghazi, Libya's second city.

Germany becomes the 13th nation to recognise the NTC as "sole legitimate representative," after Australia, Britain, France, Gambia, Italy, Jordan, Malta, Qatar, Senegal, Spain, the United Arab Emirates and the United States.

Westerwelle defended his country's position after Germany abstained from a UN Security Council resolution backing intervention in Libya and chose not to participate in the NATO-led air war launched in March.

"We were one of the first governments to say that Gaddafi must go," he said, adding that Germany's absence from the NATO-led campaign "does not mean that we are neutral."

"Colonel Gaddafi's economic isolation must be broadened," he said.

"His assets should be unblocked so they can be used to build a new Libya, whose riches are for the Libyan people," Westerwelle said of the huge financial assets secreted abroad by Libya's leader and his family and subsequently frozen.

Dirk Niebel, Berlin's economic cooperation and development minister who was also in Benghazi, said Germany would work on development projects in Libya, mainly in the sectors of water and electricity.
Niebel said Germany wanted to help refugees and "people traumatised by the war," and said that Berlin was ready to free 10 million euros in aid for the Libyan people.