Officials declined to give details on compensation to the North African country for three decades of colonial rule, but Italy's ANSA news agency reported that the two sides have agreed on reparations worth billions of dollars to be paid over 25 years.

 

Berlusconi said in an interview with a Libyan newspaper that Italy and Libya would sign an agreement to resolve their colonial dispute.

 

New partnership

  

"The friendship and co-operation agreement that we will sign on Saturday opens all avenues for the consolidation of our economic and social partnership and will increase co-operation between the two countries," Berlusconi said in the interview, to be published in Oya on Saturday.

 

Most of the compensation will be made through Italian-built infrastructure projects including a coastal highway across Libya from the Egyptian border to Tunisia.

 

ANSA said the deal is tied to the implementation by Libya of measures against illegal immigration, including joint Libyan-Italian patrols against the thousands who try to cross the Mediterranean each year, making their way to Europe in fragile boats.

 

Berlusconi's office said in a statement that the premier would also hand over to Gaddafi the Venus of Cyrene, an ancient Roman statue taken in 1913 by Italian troops from the ruins of the Greek and Roman settlement of Cyrene, on the Libyan coast.

 

Berlusconi last saw Gaddafi in June when they discussed the implementation of a December 2007 accord on joint maritime patrols to curtail the flow of illegal immigrants from Africa to Europe.

  

A Libyan delegation has been in Rome for several days negotiating the bilateral agreement.