The thousands of representatives of major tribal leaders, militia commanders and politicians who made the declaration at a conference in Benghazi said the move is not intended to divide the country. They said they want their region to remain part of a united Libya but insisted the move was needed to stop decades of discrimination against the east.
The conference said the eastern state, known as Barqa, would have its own parliament, police force, courts and capital — Benghazi, the country's second largest city — to run its own affairs. Under their plan, foreign policy, the national army and oil resources would be left to a central federal government in the capital Tripoli in the west. Barqa would cover nearly half the country, from central Libya to the Egyptian border in the east and down to the borders with Chad and Sudan in the south.
Libya's National Transitional Council, the interim central government based in Tripoli, has repeatedly voiced its opposition to an autonomous east, warning it could eventually lead to the breakup of the North African nation of 6 million.
"This is very dangerous. This is a blatant call for fragmentation. We reject it in its entirety," said Fathi Baja, the head of political committee of the NTC. "We are against divisions and against any move that hurts the unity of the Libyan people."
The declaration underscored the weakness of the NTC, which has been largely unable to establish its authority around the country since the fall of Gadhafi in August and his subsequent death in October. The Council holds little sway even in Tripoli, where militias that arose during the anti-Gadhafi revolt have divided neighbourhoods up into fiefdoms.
The prime minister of the interim government created by the NTC, Abdurrahim el-Keib, admitted Monday that the government has not been up to the task.
"The government is not doing its job. My evaluation of its performance is not good," he said in an interview on state TV. "The steps we are taking are slow."
The NTC has called for national elections in June to select a 200-member assembly that will name a new prime minister to form a government and then write a constitution.
The Benghazi conference also illustrated one of the fundamental weaknesses in post-Gadhafi Libya — the lack of political institutions. Over 42 years in power, Gadhafi stripped the country of any credible representative bodies. As a result, since his ouster, towns, cities, tribes and militias across Libya have largely taken authority into their own hands. The local power centres have confused and often thwarted the NTC's attempts to establish any national control.
Tuesday's announcement aimed to pose a federal system as a fait accompli before the National Transitional Council. The goal is to revive the system in place from 1951 until 1963, when Libya, ruled by a monarchy, was divided into three states: Tripolitania in the west, Fezzan in the southwest and Cyrenaica in the east — or Barqa, as it was called in Arabic.
The Benghazi conference has no official status. The impact it has depends on how much influence its participants can wield among the population of the east and how strongly they push their demands on a resistant Tripoli. So far other regions have not made any moves to create their own states or call for a federal system.
Easterners say the step is necessary to end the marginalization that the east suffered for decades under Gadhafi's rule. The former dictator focused development and largesse on the west, allowing infrastructure to decline in the east, an area that was a constant source of opposition to the regime.
Many in the east accuse the National Transitional Council of continuing to favour the west. After Libya declared liberation in October, the NTC and the interim government moved its offices to Tripoli. The majority of ministers in el-Keib's Cabinet are from the west.
Barqa advocates also point to the presence in Tripoli of powerful militia groups from the western cities of Zintan and Misrata, who impose their will on the ruling authorities. The two militias swept into the capital in the push that toppled Gadhafi and have since positioned themselves around vital institutions, including the airport.
At the conference, delegates raised the old Barqa state flag — black with a crescent and a star. The gathering appointed Ahmed al-Zubair, Libya's longest serving political prisoner under Gadhafi, as leader of a planned governing council for Barqa state. Al-Zubair, a descendant of the former Libyan King Idris whom Gadhafi ousted in 1969 coup, is also a member of the National Transitional Council.
The conference said elections would be held in the east in two weeks to chose a governing council.
It rejected a draft law by the NTC on the planned June election that would give the east 60 seats in the assembly, compared to around 102 for the west. Drafters say that reflects the west's larger population, but easterners see it as a continuation of discrimination.
Al-Zubair pledged to protect the rights of the region but also said Barqa state would recognize NTC as the representative for Libya in the international arena.
"Residents of Barqa, we are brothers. We protect each other," he told the gathering. "Libya will not be divided. It is one nation."
Among those who attended were top leaders of heavyweight eastern tribes, including the Ubaidat, Mughariba and Awajeer, which hold a powerful sway over large sectors of the population in the east. Also attending were commanders from the Barqa Army, a grouping of 61 eastern "revolutionary militias." Several senior Defence Ministry officials also attended and supported the declaration.
Fadl-Allah Haroun, a senior tribal figure and militia commander, said the declaration aims for administrative independence not separation.
"Federalism is not division but unity. We are not talking about changing the flag or national anthem. We are talking about different administration, a parliament and managing the financial affairs," he said.
Instead of a federal system, the NTC and el-Keib's government have called for decentralization that would give considerable powers to municipal and local governments — but not such large states — while preserving a strong central government in Tripoli.