TRIPOLI, LIBYA—Libyan lawmakers have authorized a caretaker government as the search continues for a prime minister-elect to replace Mustafa Abushagur.

Abdurrahim el-Keib, interim Prime Minister until last month, was asked to run the government as a temporary measure, according to a letter read Monday at a televised session of the General National Congress, the country’s first freely elected parliament in more than 40 years. It came a day after the 200-member legislature ousted Abushagur, thrusting the nation into deeper uncertainty a year after Moammar Gadhafi’s removal.

El-Keib’s government has been asked to prepare next year’s budget and to hold a national security council meeting, according to the letter read out by the first deputy chairman of the congress Guma Etaiga.

The premier-elect’s rejection and protests by demonstrators who say their regions are unrepresented in the government, reflect Libya’s fragile political situation since last year’s bloody uprising. The interim government has pushed to restore order and revive the economy, efforts stymied by factionalism as militias refused to disarm and regional interests dominate.

Congress will debate how to select a replacement for Abushagur. “We are discussing the procedures, and how to go about approving a new prime minister,” Hassan El Amin, an independent lawmaker from the coastal city of Misrata, said in a telephone interview.

“If you can’t even decide who will be the prime minister and can’t put a Cabinet into place, then by default it’s the people who’ve got the guns who will call the shots and investors won’t make long-term investment decisions,” John Hamilton, contributing editor to African Energy and a Libya analyst with the London-based Cross-border Information consultancy, said by phone.

Abushagur had missed an already-extended Oct. 7 deadline for the new Cabinet after the National Congress rejected his earlier list. Much of the criticism revolved around different groups or factions looking to secure representation for their regions in the Cabinet — a demand Abushagur said undercut his efforts.

“I was going to form a national unity government, not based on quotas,” he told parliament in Tripoli Sunday. “But then there was pressure on me. People wanted ministers from their regions,” he said.

“Anybody who believed that Libya was going to be the poster child for easy transitions and good governance wasn’t focused on the tribal and regional divisions that will impede stability,” said Aaron David Miller of the Washington-based research group Woodrow Wilson Center.

Reflecting the uncertainty in the country, Egyptian Foreign Ministry spokesman Amr Roshdy said his government was working with Libya to evacuate roughly 1,000 Egyptians in and around the town of Bani Walid, a former Gadhafi-era stronghold where at least 2,000 militiamen have converged.

The militiamen belong to an umbrella group called the National Shield and gathered in response to the death of a former rebel credited with helping in Gadhafi’s capture.

The build-up also comes after a sharp pushback against Islamist militias believed involved in the death of the U.S. ambassador to Libya and three colleagues after the Sept. 11 attack on the American consulate in Benghazi.

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