Hundreds of Libyan soldiers protested on Thursday in the eastern city of Benghazi, demanding payment of overdue wages and complaining militia groups had taken over their bases and were not interested in joining a new national army.

The soldiers, part of a force marginalised by ousted leader Muammar Gaddafi, gathered outside a branch of the central bank in Benghazi in their military uniforms and clutching their arms.

They said the new government should focus on building a new army rather than giving cash compensation to former rebels who have formed powerful regional militia since ousting Gaddafi.

The revolutionaries don't want to join an organised military, they want to keep their current situation, said Al Mabrouk Abdullah al-Oraibi, who worked in the military's accounting department but now works in the military police.

The former dictator distrusted the military and effectively dismantled the armed forces in the 1990's, leaving them with little personnel and arms.

He placed real power in the hands of his own militias which moved swiftly to crush protests against him in February.

A large number of military officers defected in the early days of the uprising. Some ordinary soldiers were pressured into fighting for Gaddafi but many stayed at home or joined the revolution.

We haven't been paid for three months, Oraibi, 28, said. The national council is marginalising the Libyan army, they are in favour of the militias.

Earlier this week, Libya appointed a head of the armed forces in the first significant move to build a new military.

At the same time, Mustafa Abdul Jalil, the chairman of the National Transitional Council (NTC), warned that intermittent turf wars among rival militias could spark a civil war after four militants were killed in a clash in Tripoli.

Former rebels want more cash for ousting Gaddafi after the nine-month conflict, and want the government to cut off the salaries of top officials who served under Gaddafi.

Oraibi said the NTC should start reorganising the army immediately, adding that military camps were controlled by the militias rather than the military.

Ibrahim al-Sahati, 50, who served in the army for 32 years and joined the military police after the civil war that ousted Gaddafi, was more concerned about providing for his children.

Every time I go the military camp to ask about my salary, they say I'll it get soon, and this has gone on for four months, Sahati said.

I have kids and the school year is about to start, the father of eight children said. The kids need clothes, schoolbags, books and stationary and I have nothing to cover all these costs.

He said the bank's management had agreed to pay the protesters for two months, but he did not know when he would receive the payments.

(Reporting by Mohammed Al Tommy; writing by Mahmoud Habboush; editing by Philippa Fletcher)