Italian Prime Minister Mario Monti, on his first visit to Libya since the fall Muamar Gaddafi, is leading a delegation of high-ranking officials, including Foreign Minister Giulio Terzi and Admiral Giampaolo Di Paola.

During his talks with senior Libyan officials, Monti is expected to sign a series of bilateral agreements, including one that will offer Italy's services in training the police force of the new Libya, officials said.

Monti will also open a consulate in Libya and hand over the sculpted head of the first century Domitilla Minor, which was smuggled from the Libyan town of Sabratha in the 1960s and recently auctioned at Christie's, Libyan sources said.

Monti's visit is expected to focus on reviving a friendship treaty between Italy and Libya that was suspended during last year's conflict, which saw Gaddafi ousted and killed.

Mustafa Abdel Jalil, the head of Libya's ruling National Transitional Council, visited Rome last month to discuss the treaty with his country's former colonial power.

The treaty, which was signed by Gaddafi and former Italian prime minister Silvio Berlusconi, helped ease the way for billions of euros (dollars) in two-way investments.

Italy also agreed to pay Libya five billion euros ($3.9 billion) over 25 years in compensation for colonial rule and the construction of around 1,700 kilometres (1,050 miles) of coastline motorway in Libya.

Under the treaty, more than 180 Italian businesses took advantage of the favourable terms for trade links, including Finmeccanica, Impreglio and ENI, which became the biggest foreign energy producer in Libya.

Monti's delegation includes the head of ENI, which has signed a memorandum of understanding for undertaking social projects worth 380 million euros, Italian sources said.

His visit also comes at a time when the Libyan Central Bank has decided to refrain from participating in a planned recapitalisation of Italian bank UniCredit, according to Dow Jones Newswires.

The Libyan central bank's current holding of 4.9 per cent of the capital in UniCredit would be cut to around 2.7 per cent, the Dow Jones report said.

Rome had unblocked funds frozen when Gaddafi was running Libya so that the central bank could take part in UniCredit's capital increase worth a total 7.5 billion euros ($9.7 billion), as it was initially expected to do.

The Libyan Investment Authority also owns a separate UniCredit stake of 2.594 per cent. UniCredit has declined to comment on the report.

Monti's visit is expected to follow next month with another high-level Italian delegation.