The funds would be shifted from Pentagon operations to help Libya develop a force to counter increasingly powerful militants, like those who attacked the US consulate last month killing four Americans.

The Times said plans for the elite Libyan force, expected to number some 500 troops, were in the works before the September 11 attack but have been accelerated since then amid increased concern over the North African country.

The Times cited a State Department memo sent to Congress on September 4 as saying that the goal of the program is to enhance "Libya's ability to combat and defend against threats from al Qaeda and its affiliates."

It cited a companion Pentagon document as saying the commando force would "counter and defeat terrorist and violent extremist organizations."

The Times said a final decision on the program has not yet been made, and that US officials were still working out the exact details in consultation with Libyan political and military leaders.

Neither the State Department nor the Pentagon could immediately be reached for comment.