Italy's pledge to pay Libya compensation for its colonial rule paves the way for further Italian investments, such as in energy and infrastructure, but raises uncomfortable issues for former colonial powers in Africa.

In a tent outside Benghazi on Saturday, Silvio Berlusconi, Italy's centre-right prime minister, returned a headless statue of Venus carted away by Italians decades ago and signed a friendship pact with Muammer Gaddafi, the Libyan leader.