Former Libyan leader Muammar Gaddafi died of wounds suffered on Thursday as fighters battling to complete an eight-month-old uprising against his rule overran his hometown Sirte, Libya's interim rulers said.

Another report said, Mutassim Gaddafi, one of the ousted Libyan strongman's sons, was found dead.

"We found him dead. We put his body and that of (former defence minister) Abu Bakr Yunis in an ambulance to take them to Misrata," said Mohamed Leith.

Single most dramatic development

Gaddafi's killing, which came swiftly after his capture near Sirte, is the most dramatic single development in the Arab Spring revolts that have unseated rulers in Egypt and Tunisia and threatened the grip on power of the leaders of Syria and Yemen.

Italian Prime Minister Silvio Berlusconi summed up the incident in Latin.

"Sic transit gloria mundi (Thus passes the glory of the world)," Berlusconi is reported to have said in Latin about the ousted ruler of Italy's former colony, adding: "Now the war is over."

'Hit in the head'

"He (Gaddafi) was also hit in his head," National Transitional Council official Abdel Majid Mlegta told Reuters.

"There was a lot of firing against his group and he died."

The body, according to a report, is being taken to a location which is being kept secret for security reasons.

"Gaddafi's body is with our unit in a car and we are taking the body to a secret place for security reasons," Mohamed Abdel Kafi, an NTC official in the city of Misrata told Reuters.

'Don't shoot, don't shoot'

Mlegta told Reuters earlier that Gaddafi, who was in his late 60s, was captured and wounded in both legs at dawn on Thursday as he tried to flee in a convoy which NATO warplanes attacked. He said he had been taken away by an ambulance.

There was no independent confirmation of his remarks.

An anti-Gaddafi fighter said Gaddafi had been found hiding in a hole in the ground and had said 'Don't shoot, don't shoot' to the men who grabbed him.

His capture followed within minutes of the fall of Sirte, a development that extinguished the last significant resistance by forces loyal to the deposed leader.

The capture of Sirte and the death of Gaddafi means Libya's ruling NTC should now begin the task of forging a new democratic system which it had said it would get under way after the city, built as a showpiece for Gaddafi's rule, had fallen.

Gaddafi, wanted by the International Criminal Court on charges of ordering the killing of civilians, was toppled by rebel forces on August 23 after 42 years of one-man rule over the oil-producing North African state.

NTC fighters hoisted the red, black and green national flag above a large utilities building in the center of a newly-captured Sirte neighborhood and celebratory gunfire broke out among their ecstatic and relieved comrades.

Hundreds of NTC troops had surrounded the Mediterranean coastal town for weeks in a chaotic struggle that killed and wounded scores of the besieging forces and an unknown number of defenders.

NTC fighters said there were a large number of corpses inside the last redoubts of the Gaddafi troops. It was not immediately possible to verify that information.