Libya's government, clinging to power after a popular revolt, has ordered massive cash handouts include wage increases, food subsidies and allowances, state television reported on Friday.
It said each family will receive 500 Libyan dinars ($400) to help cover increased food costs, and that wages for some categories of public sector workers would increase by 150 percent, the television station said.
The announcement came after a former Libyan minister told Al Jazeera he feared Libyan Leader Muammar Gadhafi may resort to using biological and chemical weapons as a last resort amid the country's escalating and violent unrest.
Former justice minister Mustafa Abdel Galil told the broadcaster Al Jazeera that Gaddafi had those weapons and would not hesitate to use them against civilians.
"At the end when he's really pressured, he can do anything. I think Gadhafi will burn everything left behind him," he warned late Thursday.
he regime is known to still possess substantial quantities of mustard gas. Gadhafi agreed in 2003 to dismantle Libya's nuclear and chemical weapons program, and has destroyed about 50% of its chemical weapons, but due to delays is still believed to have stockpiled 9.5 tons of mustard gas.
In a speech Thursday, Gadhafi blamed terrorist network al-Qaeda for 10 days of anti-government protests threatening to unravel his 41-year-long grip on the country.
His comments were made as several northern cities were captured by the opposition, and dozens of Libyan diplomats and security members defected to side with the protesters.
Estimates by international groups and diplomats of the number of people killed by Gadhafi's security forces range from 600 to 2,000.
Troops loyal to Gadhafi shot peaceful protesters in the town of al-Zawiya Thursday evening, killing at least 100 Al Jazeera reported, quoting witnesses.
They were trying to kill the people, not terrify them," the witness said.
At least 390 people were killed in clashes between protesters and forces loyal to the Libyan regime in the city of Benghazi alone, said Nuri al-Obeidi, a security chief who switched sides and joined the protesters, who meanwhile control Libya's second-largest city.