Defence secretary Liam Fox has confirmed that a British diplomatic team is in Libya talking to rebel forces.
But he declined to comment on reports that the SAS unit guarding the team had been detained by forces opposed to Colonel Muammar Gaddafi.
Up to eight British soldiers are believed to have been captured as they escorted the diplomatic mission through rebel-held territory in the east of the country.
According to the Sunday Times, the SAS troops were taken by rebels to Benghazi, the largest city held by the opposition, where they were detained.
Interviewed on the BBC's Andrew Marr Show, Dr Fox said there was a "small diplomatic team" in the eastern city of Benghazi.
Meanwhile, at least 18 people, including a baby, have been killed in fighting between forces loyal to Libyan leader Muammar Gaddafi and rebels in the town of Misrata.
Eyewitnesses and rebel sources say that the towns of Tobruk and Ras Lanuf, which government forces claim to have retaken, actually remain under rebel control.
