Since the overthrow of Gaddafi's regime, several groups from outside the capital have set up bases in Tripoli [Reuters]

A gun battle between rival groups has raged near office buildings and five-star hotels in central Tripoli, in the latest sign of unrest in Libya following the overthrow and killing of Muammar Gaddafi.

Witnesses said gunfire could be heard on Wednesday coming from near the beach house of Gaddafi's son, Saadi, on the Mediterranean Sea at Tripoli.

Thick smoke spewed out from near the house, and ambulance sirens could be has heard as rival groups, using heavy machine guns, clashed in the mostly business district of Tripoli.

Interior ministry forces had blocked a kilometre-long section of road alongside the beach, but they did not appear to be intervening.

A Reuters reporter said two pick-up lorries, with anti-aircraft guns on the back, drove past towards the fighting.

Naji Awad, an interior ministry official, said the fighting was between members of the Misrata and Zintan brigades, two cities that played crucial roles in the fight against Gaddafi's forces.

"There are two groups fighting," Awad, who was monitoring the battle from near the fighting, said.

"Misrata controls a police academy building up the road and they are fighting with Zintan. We do not know why they are fighting."

Libya's ruling National Transitional Council (NTC) is struggling to impose its authority on the country and form a functioning national police force and army.

Since Gaddafi was killed by opposition fighters in October, armed groups have clashed in areas around the country as they try to gain influence in the new Libya.

Several groups from outside have set up bases in Tripoli. They clash with each other intermittently often because of disputes over who controls which neighbourhoods of the city.

The violence on Wednesday was the first time in weeks that a major gun battle had broken out in the centre of Tripoli.