Libya's rival PM Fathi Bashaga on Wednesday named the coastal of Sirte as the seat of his administration.
Bashaga was appointed by the House of Representatives based in Tobruk in February, setting the former interior minister on a collision course with Abdelhamid Dbeibah, the prime minister of the Government of National Unity.
Dbeibah who governs from Tripoli dismissed Bashaga's appointment and refused to vacate office.
There were fears that rival army factions would in a battle for control of Tripoli.
But Bashaga announced Wednesday that his outfit would exercise its functions from Sirte.
Bashaga enjoys backing from eastern Libyan military strongman Khalifa Haftar, while Dbeibah is supported by army units loyal to the government of National Accord which sits in Tripoli.
With the appointment of Bashaga, the north African country slid back into a political crisis where two rival governments claim control.
The national assembly accused Dbeibah of incompetence after a presidential election planned for last December was aborted.
It said Dbeibah's mandate had elapsed then.
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