Libyan assets in the UK, frozen as part of measures against Col Muammar Gaddafi’s regime, amount to just under £9.5billion, the Treasury has confirmed.

It is the first time the figure has been made clear to survivors of the 1996 IRA Docklands bomb blast who are looking for compensation from Libya for supplying the explosive Semtex, which killed two and injured scores more.

Poplar and Limehouse MP Jim Fitzpatrick said it was “another piece of the jigsaw” when he closed a debate in Westminster Hall on Tuesday about the battle for compensation by the Docklands Victims Association . He had initially thought the figure was around a billion.

However, Treasury Minister Gregory Hinds said that the money – seized under an EU directive – still belonged to the Libyan government and was not available for compensation.

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“Access to the frozen funds can only be licensed according to grounds set by the UN and the EU. It is clear that none of these licensing grounds would allow the Treasury at will to select a frozen account and require funds be paid to a third party.

“I understand and share the concerns for the victims of the Docklands bombing I’m afraid the legal framework is based on preserving the funds for the Libyan people.”

He added that the best course of action was through talks and reconciliation with the Libyan government although he said the Libyan people considered themselves to be victims of the executed dictator and not perpetrators of the atrocities carried out with his assistance.

Mr Fitzpatrick told a gathering of minister and MPs that he recognised the battle would take time but “all the victims want is justice, justice denied to them for over 20 years”.