Britain has a small diplomatic team in Benghazi, said Secretary of State for Defence Liam Fox, substantiating reports that a UK diplomat and 8 SAS officers have been detained by rebels.

"I can confirm that there is a small diplomatic team in Benghazi. We are in touch with them but it will be inappropriate for me to comment, due to reasons that I am sure you understand," Fox told the BBC.

Earlier the Sunday Times had reported that eight SAS soldiers and a UK diplomat were detained by rebels in Libya, with whom the UK servicemen were actually trying to establish contact.

Many in Libya are concerned that a possible foreign military support might be interpreted by their foe, Libyan leader Muammar Gaddafi, as an anti-Libyan foreign intervention and thus an argument in his favor.

The eight SAS servicemen were escorting a junior UK diplomat through rebel held Libyan territory, when they were captured by rebels and sent to a local military base.

The Foreign Office and the MoD have neither confirmed nor denied the specifics of the report.

The group of arrested persons were reportedly also questioned in Benghazi by a leader of the rebellion. The Sunday Times also reports that opposition officials are trying to hush up the incident so as not to draw the ire of ordinary Libyans.