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VIENNA (Reuters) - The European Union should set up a “giant refugee city” on the Libyan coast and process asylum claims there from refugees arriving from other African countries, Hungarian Prime Minister Viktor Orban said on Saturday.

Mr Orban, speaking in Vienna after a summit of European and Balkans countries on the refugee crisis, gave few details and said that his own influence in such matters was small. But he insisted that the European Union’s external borders should be under “total control” - including the Mediterranean border, in which Libya was instrumental. [L8N1C00EQ]

Libya has a government backed by the UN, but has been in political chaos since the fall of Muammar Gaddafi in 2011 and has splintered into rival armed factions.

The Hungarian leader, who has sparked controversy by vilifying refugees and erected a razor wire fence along his country’s southern border last year, said the Balkans route was closed for now and vowed to keep it that way, but added Europe was still vulnerable from the south.

He said Libya and Egypt were both important partners.

“The EU needs a new Libya policy,” he told a press briefing in Vienna. “Libya is a region whose shores can be used to set sail for Europe because no state exists there.”

Libya’s unity should be preserved, with a new Libyan government set up and brought into a cooperation agreement, he said.

“Unless we preserve Libya as one and stabilize it we cannot create the gigantic refugee city by Libya’s Mediterranean coast,” he said.