Hannibal Gaddafi was briefly arrested in Geneva in July

Libya is to withdraw assets from Swiss banks, estimated at $7bn, as a diplomatic row over the arrest of the Libyan leader's youngest son escalates.

Hannibal Gaddafi and his wife were detained in Geneva for assault in July, but the charges were later dropped.

The state-run news agency Jana also said that Libya was halting oil shipments to Switzerland.

An unnamed foreign ministry official said it was for the "poor treatment of Libyan diplomats and businessmen".

All kinds of economic co-operation with Switzerland are to be stopped until Geneva clarifies its motives, Jana quotes him as saying.

Compensation

The BBC's Rana Jawad in the Libyan capital, Tripoli, says Libya had previously demanded an apology from Swiss authorities for the arrest of Muammar Gaddafi's son.

Tamoil says it supplies 20% of the Swiss fuel market

The couple were accused of hitting two of their staff.

They were released on bail three days later and Libya did not follow through on a threat at the time to halt oil shipments.

The two servants dropped all charges after receiving undisclosed compensation.

Libyan oil firm Tamoil says it supplies 20% of the Swiss fuel market and has more than 300 petrol stations in the country.

Swiss authorities have made no immediate comment on the latest developments.