Two Swiss businessman left the shelter of their country's embassy in Tripoli this morning after Libyan police surrounded the building in a long-running row which has drawn in governments across Europe.
One of two men, Rachid Hamdani, emerged from the building and was driven away by Libyan officials, a Reuters reporter at the scene said. Mr Hamdani's lawyer said his client was heading by car for neighbouring Tunisia after Libyan authorities gave him clearance to leave the country.
Later the second man, Max Goeldi - whom Tripoli had wanted to begin serving a four-month prison term for immigration violations - also left the building. A police source told Reuters that he would be driven to jail to start his sentence.
Tripoli had issued a deadline to Switzerland to hand over the two men, who have been in the embassy for months, by midday local time (1000 GMT) or face unspecified consequences.
The diplomatic row has raged at a time when Western companies are lining up to invest in oil-producing Libya as the country emerges from decades of international isolation.
It began as a dispute between Tripoli and Berne, but escalated last week when Libya stopped issuing visas to most European citizens in retaliation for Swiss immigration restrictions imposed on Libyans.
Both men had been barred from leaving Libya since July 2008, soon after Swiss police arrested a son of Libyan leader Muammar Gaddafi at a luxury lakeside hotel in Geneva and charged him with mistreating two domestic employees.
The charges were later dropped and Libyan officials have denied any connection between the arrest in Geneva and the prosecution of the two businessmen.
Mr Hamdani is being allowed to leave Libya because, unlike Goeldi, he has been acquitted of all the charges against him.
The Reuters reporter outside the embassy said earlier dozens of police officers were outside the building, but later the police numbers were reduced.
The reporter said he could see about 15 police officers around the embassy, with five police vehicles parked about 30 metres away from the embassy.
Libyan Foreign Minister Moussa Koussa summoned European Union ambassadors last night to hand them the ultimatum, Libya's official Jana news agency said.
The agency quoted the minister as saying that by giving Goeldi refuge in its embassy in Tripoli, Switzerland had been in violation of international conventions on diplomatic immunity.
"Procedures will be taken in the event that the embassy does not implement what is required of it by the deadline," the news agency reported. No details were given of what action the Libyan authorities had planned to take.
Last week Libyan officials announced that they had stopped issuing visas to citizens from the Schengen area - a borderless zone that includes Switzerland and most European countries.
Libyan media said the move was retaliation for Switzerland putting several senior Libyans, including members of Muammar Gaddafi's family, on a visa black-list.
European Union foreign ministers convened urgent talks with Libyan officials to try to resolve the dispute.
Reuters