Libya welcomes Gaddafi compensation offer by Swiss

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TUNIS, March 17 (Reuters) - A top Libyan official on Wednesday welcomed as a "step forward" a call by Swiss officials for damages to be paid to a son of Libyan leader Muammar Gaddafi who was arrested in Geneva in 2008.

Relations between Libya and Switzerland broke down after Hannibal Gaddafi and his wife were held briefly on charges, later dropped, of abusing domestic servants in a Geneva hotel.

Libya cut oil supplies to Switzerland and withdrew more than $5 billion from Swiss bank accounts. This month it declared a trade and economic embargo on Switzerland.

In a statement published on its website on Wednesday, the Canton of Geneva said it deplored that the newspaper Tribune de Geneve came into possession of police pictures of Hannibal Gaddafi, taken when he was arrested in Geneva in 2008.

The canton said one of its employees seemed to have been behind the newspaper getting the photos and that compensation, the amount of which had yet to be determined, should be paid.

Libya has been demanding compensation for the leaked photos of Hannibal Gaddafi for months.