The British Foreign Secretary William Hague said that the UK will recognize the Libyan rebels as the "sole governmental authority" of that war-torn country.
The United States and France have already recognized the Libyan opposition as the legitimate government.
"The Prime Minister and I have decided that the United Kingdom recognizes and will deal with the National Transitional Council as the sole governmental authority in Libya," Hague stated.
"I'm making this announcement today to reflect the facts on the ground and to increase support for those fighting and working for a better future in Libya.”
Coincident with this announcement, the British government has also ordered the expulsion of all remaining diplomats of Moammar Gaddafi’s regime still in England.
According to BBC, there are believed to be eight Libyan diplomats stationed at the embassy in Knightsbridge, London.
The charge d'affaires of the Libyan embassy, Khaled Benshaban, will have three days to leave Britain. The former Libyan ambassador to the UK, Omar Jelban, was already expelled in May.
In their place, Britain will ask the Benghazi-based National Transitional Council (TNC) to name a new diplomatic envoy for London.
Explaining the decision, Hague said that the TNC is dedicated to creating a "more open and democratic Libya... in stark contrast to Gaddafi whose brutality against the Libyan people has stripped him of all legitimacy.”
The British government will now treat the NTC "on the same basis as other governments around the world.” As a result, the UK can now provide "greater practical assistance than we've been able to give so far", Hague added.
In addition, Hague said that assets belonging to an oil company now under the control of NTC will be unfrozen in order to help meet some “basic needs” in Libya. Such assets are valued at £91-million.
Other Libyan assets in the UK will also be unfrozen gradually.
Meanwhile, the five-month civil war in Libya rages on, but Hague indicated there will be let-up in the NATO campaign against Gaddafi.
"We will sustain our actions for as long as necessary and our recent decision to deploy an additional four Tornado aircraft is a concrete illustration of this,” Hague stated.
"What I have announced today will allow us to give further assistance to the people of Libya and underline the message to the Gaddafi regime that their legitimacy has come to an end."