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German navy sailors reach a migrants boat off the coast of Libya in March 2016. Photograph: Matthias Schrader/AP

Libyas UN-backed prime minister, Fayez al-Serraj, has said Nato or EU ships could be permitted to operate in Libyan waters alongside the national military coastguard to slow the flow of people-smuggling across the Mediterranean.

The move came as a report claimed elements of the Libyan coastguard were complicit in the smuggling and said returning anyone caught on boats to coastal detention centres was risky since conditions there were horrendous.

Serrajs comments after talks at Nato on Wednesday will be a boost to EU plans to move its anti-smuggling mission Operation Sophia into Libyan waters to help prevent migrants from reaching Europe. The EU is due to discuss a comprehensive plan for Libya at a special heads of state summit on Friday.

If there is something to be carried out jointly between the Libyan navy and any other party interested in extending a hand to the Libyan navy, that would be possible, Serraj said.

Of course, we have to modernise our navy flotilla and enhance its capacities. Nato or any other friendly nation on a bilateral basis could extend a hand in this.

Smugglers boats currently can only be turned back to Libya if they are stopped inside Libyan waters, but both Nato and the EU need Libyan government consent to operate inside its sovereign waters. This year tens of thousands of migrants will face the risk of drowning while the smugglers networks benefit from the political chaos in Libya.

Serraj, struggling to gain authority inside Libya, is under pressure not to be seen to be succumbing excessively to outsiders.

On Wednesday Italy pledged 200m (170m) in funds to several African countries as part of its drive to reduce migration at source. The foreign minister, Angelino Alfano, said the fund aimed at Niger, Libya and Tunisia would help bolster the fight against human trafficking and illegal migration.

He said Europe was not trying to build a wall but helping countries to reduce the incentive to migrate.

A report by the Clingendael Institute, a Dutch thinktank, drawing on first-hand research, said migrants intercepted or rescued at sea by the Libyan coastguard were sent to detention centres where they often spend months languishing with no legal recourse, subject to the whims of their jailers.

It said some smugglers tortured migrants to secure the release of more money from their families, or forced them to work in order to continue their journey. Moreover, migrants are reportedly sold to criminal groups if they cannot pay for their voyage across the Mediterranean: for 15,000 they were sold to groups, mostly Egyptians, who are involved in removing and selling organs. Finally, based on self-reporting by migrants, up to 40% of migrants are forced on to boats.

The report added: Particularly in the northwestern part of Libya, migration is accompanied with absurdly high levels of crime and violence, and migrants are subject to the whims of the group that controls the area they are in. The line between smuggling and trafficking runs thin here, as cases of kidnapping, torture, sexual violence and killings are widespread, and the situation in and around detention centres for immigration is horrific.

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Libya may allow EU ships to pursue people-smugglers in its waters - The Guardian