By Andrew Quinn
ISTANBUL (Reuters) - The United States formally recognized Libya's rebel opposition as the legitimate government on Friday, an important diplomatic step which could unlock billions of dollars in frozen Libyan funds.
Secretary of State Hillary Clinton announced Washington's move at an Istanbul conference which also agreed a road map whereby Muammar Gaddafi should relinquish power and plans for Libya's transition to democracy under the rebel National Transitional Council (TNC).
"Until an interim authority is in place, the United States will recognize the TNC as the legitimate governing authority for Libya, and we will deal with it on that basis," Clinton said in prepared remarks.
(reporting by Andrew Quinn; editing by Simon Cameron-Moore)
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