CAIRO, January 3 (IslamOnline.net & News Agencies) - Libyan Leader Muamar Gaddafi is set to launch sweeping campaign of internal reforms that would see reshuffles in intelligence, security services and state-run institutions, according to a London-based Arab newspaper Saturday, January 3.

The Libyan leader will instruct the country's public institutions to adopt wider political and democratic reforms after settling old scores with the United States and Britain, well-placed sources told Al-Sharq Al-Awsat daily.

The new set of reforms will help clean Libya's different committees or ministries of abuse of power and corruption and sack a great number of Libyan officials, the sources told the daily.

A top Libyan official told the paper that Gaddafi would endorse the republican system, hoping that notorious human rights laws would be annulled and worsening situations in prisons improved.

He said the regime is now willing to turn over a new leaf with Libyan exiles provided that they are not accused of treason or being proxies.

The mass-circulation paper said a Libyan "sovereign institution" is currently drawing up a list of officials who helped develop the country's weapon programs in order to be discharged later.

Although the United Nations left its embargo last September following the compensation deal, Libya now seeks to have the remaining U.S. sanctions removed.

Libya's Prime Minister Shukri Ghanim told the New York Times in an interview published Friday, January 2, that that the United States should act quickly to reward his country.

He warned that unless the United States lifted sanctions by May 12, Libya would not be bound to pay the remaining $6 million promised to each family of the airliner's 103 victims.

A quick lifting of American sanctions would allow American oil companies to return to Tripoli this spring and pave the way for unfreezing $1 billion in assets that Libyan officials say are languishing in American banks.

Ghanim said his country would like to "accelerate to the maximum" the dismantling of its nuclear, chemical and biological weapons programs so that U.S. President George W. Bush would be able to tell Congress in the next few months that Libya had fully and transparently destroyed or surrendered all its illicit weapons.