The alleged murder plot is being investigated by the United States, Saudi Arabia and Britain.

The New York Times reported on Thursday that the plot involved firing rockets at Crown Prince Abd Allah bin Abd al-Aziz's motorcade.

US officials familiar with the case told the daily the case was launched after two "terrorism" suspects gave "credible evidence".

Abd al-Rahman Almoudi, an American Muslim arrested in October for violating a US ban on travel to Libya, described in a plea agreement how he met twice with al-Qadhafi in June and August 2003 to discuss details of the assassination.

Almoudi, the US officials said, told US investigators the Libyan leader once commented: "I want the Crown Prince killed either through assassination or through a coup."

Rocket attack

Separately, in Saudi Arabia, Colonel Muhammad Ismail told his Saudi interrogators he was the operational commander of the plot.

Crown prince Abd Allah is Saudi
Arabia's de facto ruler

Ismail is described as a Libyan intelligence officer captured by Egyptian police in November after he fled Saudi Arabia, where he tried to pay off four Saudis who were preparing to assassinate the monarch.

Ismail named two Libyan intelligence chiefs who reported directly to al-Qadhafi as giving him instructions on the assassination plot.

As part of the conspiracy, Almoudi and Ismail are alleged to have travelled to London to contact Saudi dissidents through whom they could recruit assassins in Saudi Arabia.

They distributed more than $2 million in cash in the British capital according to the account of their statements, the daily said.

The plan was to attack the Saudi monarch's motorcade with armour-piercing missiles or rocket-propelled granades. The hitmen were to receive $1 million in cash for their work.

Libyan scorn

Libyan Foreign Minister Abd al-Rahman Shalgam poured scorn on the allegations.

He said: "I insist on stating officially that this article is without foundation, that Libya has committed no such act and that it is firmly engaged in the fight against terrorism."

"I insist on stating officially that this article is without foundation, that Libya has committed no such act and that it is firmly engaged in the fight against terrorism"

Abd al-Rahman Shalgam,
Libyan Foreign Minister

Shalgam said "those who spread such stories are elements hostile to Libya" and "want to poison our relations with Saudi Arabia", adding that those relations are "good and normal".

And interviewed in London, the Libyan leader's son, Seif al-Islam al-Qadhafi, described the reported plot as "nonsense".

But if the alleged conspiracy turns out to be true, it could undermine al-Qadhafi's efforts to convince the international community that he does not sponsor "terrorism".

A senior Bush administration official told the daily that the emergence of convincing evidence that al-Qadhafi ordered or condoned an assassination and "terror" campaign, could cause a "180 degree" change of American policy towards Libya.

US officials said the investigation of the alleged plot is one reason why Libya has not been removed from a US State Department list of countries that support "terrorism".