Libya 's western allies are financially "strangling" the rebels due to the lack of progress in releasing funds to pro-democracy fighters trying to unlock up to $1.15 billion of cash in the U.K. , the National Transitional Council finance and oil minister said Tuesday.

"They [the allies] are strangling us," Ali Tarhouni said."They just don't understand we are in a war."

"There is this amount of Libyan dinars we've been asking for that are printed and are sitting in the U.K. This is our money and we need these dinars," he added.

Rebels fighting forces loyal to Libyan leader Col. Muammar Gadhafi are desperately short of cash and are lacking basic supplies like food and medicine.

The National Transitional Council, or NTC, is the name of the interim rebel government that has been recognized by countries such as Italy and France .

Tarhouni said the cash in the UK was Libyan dinars belonging to Gadhafi which had subsequently been "seized" by the U.K. government a couple of months ago. He said it wasn't clear whether the amount of money was either 900 million Libyan dinars or 1.4 billion dinars.

In early March U.K. authorities intercepted a ship carrying around GBP100 million to Libya .

Earlier in the month, Tarhouni said the Libyan rebel leadership needed $3 billion over the next six months to cover basic costs like food fuel and salaries, but so far the NTC were a long way off securing anything close to that.

Rebels are asking North Atlantic Treaty Organization, or NATO, countries who have been conducting air strikes on Gadhafi targets in Libya , for loans to help them run the parts of the war-torn North African country they control.

In Rome earlier in the month at the so-called Libya contact group's last meeting, countries agreed on setting up a temporary fund for the rebels.

"I have a mechanism [fund] but no money," Tarhouni said, who just a few months ago was a lecturer at the University of Washington in the U.S. Currently, he said, the rebels were $23 million in debt.

Fighting between rebels and Gadhafi troops has now entered its fourth month and the NTC is producing no oil because production facilities under its control were bombed by Gadhafi forces last month.

The rebels have so far only managed to sell a shipment containing one million barrels of oil "over a month and half ago", Tahouni said.

Qatar , the first Arab state to recognise the rebels as the official Libyan government and to join NATO-led air strikes, helped the NTC market its first shipment of oil.

The wealthy Gulf Arab state set up a bank account at state-owned Qatar National Bank for money made from rebel oil sales but Tahouni said these funds had run dry.

Producing oil wasn't a priority for the rebels because "$100 million is not going to do it for me every two or three weeks" he said in reference to the one million barrels of crude sold in the only rebel shipment over six weeks ago.

Tarhouni estimated that a minimum $165 million worth of assets belonging to the Gadhafi regime have been frozen abroad by the United Nations and the European Union.

"We don't want them to be unfrozen," he said. "Keep them frozen because that is a form of protection for the integrity of these assets--what we want is to get something as a pledge of collateral that will allow us to run this war."

The U.S. has allocated $25 million to help the rebels procure supplies, but because of legal issues it has so far declined to release any of the $34 billion in Libyan assets that were frozen by the Treasury Department this year in the wake of Col. Gadhafi's violent crackdown on protesters.

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