Britain has officially recognized Libya’s rebel opposition as the country’s sole governmental authority and expelled all of the remaining Libyan diplomats loyal to Moammar Gaddafi, Foreign Secretary William Hague said Wednesday.

The decision reflects the Transitional National Council’s “increasing legitimacy, competence and success in reaching out to Libyans across the country,” Hague said.

Speaking at a news conference in central London, Hague said that Britain would deal with the rebel council “on the same basis as other governments around the world” and has invited it to send an envoy to take over the Libyan Embassy in London. He also said Britain would unfreeze millions in frozen rebel assets.

The moves appeared intended to ratchet up pressure on Gaddafi’s regime, which has been locked in a five-month-long battle with rebels and a NATO-led coalition. Top British military officials had earlier warned that British forces were feeling squeezed by dual deployments in Libya and Afghanistan.

The announcements Wednesday followed an agreement struck this month in Istanbul in which the Libya “contact group,” made up of the United States, Britain and nearly 30 other nations, decided to grant the transitional council diplomatic recognition.

Shortly before Wednesday’s news conference, the Libyan charge d’affaires was summoned to the Foreign Office and told that he has three days to leave Britain and that the seven other remaining diplomats and their dependents must leave over the summer, according to a senior Foreign Office official who spoke on the condition of anonymity. The Libyan ambassador was expelled in May in retaliation for an attack on the British Embassy in Tripoli.

Backing up its diplomatic moves, Britain will unfreeze $149 million in assets belonging to the Arabian Gulf Oil Company, a Libyan oil firm controlled by the rebel council, Hague said. The money will help the rebels to pay for “basic needs,” including the “crucial provision of fuel” and public-sector salaries, he said.

Like the United States, Britain has been wrestling with how to free up billions of dollars in Libyan assets that have been frozen since the uprising began in February. Hague said that “we will work hard with our international partners in the coming weeks to unfreeze further Libyan assets.”

British officials said earlier this week that Gaddafi could perhaps stay in Libya, provided he stepped down. Hague said Wednesday that he would prefer that the Libyan leader left, but stressed that what happens is “up to the Libyan people to decide.”

Hague also commented on footage shown on British television on Tuesday of Abdel Basset Ali Megrahi, the only man convicted in the bombing of Pan Am Flight 103, which killed 270 people, most of them Americans, over Lockerbie, Scotland, in 1988.

Megrahi, who was diagnosed with terminal prostate cancer, was released from a Scottish prison on compassionate grounds in 2009. Hague said the footage showing Megrahi in a wheelchair and apparently attending a political rally for Gaddafi was “a further reminder that a great mistake was made when he was released.”

He also said the medical advice given to the Scottish government in 2009 that Megrahi had about three months to live was “pretty much worthless.”