Labour has accused the government of "serial bungling" over Libya, following a botched SAS mission to make contact with opponents of the country's leader.
Six soldiers and two Foreign Office officials were detained for two days by rebels in eastern Libya but were freed on Sunday and left the country.
Foreign Secretary William Hague said the men were withdrawn after a "serious misunderstanding" over their role.
Labour's Douglas Alexander said ministers were losing their grip.
Mr Alexander, shadow foreign secretary, told the Commons: "I believe I speak for many when I say that the news on Sunday that British diplomatic and military personnel were being held was seen as just the latest setback for the UK and raises further serious questions about ministers' grip and response to the unfolding events in Libya."
The mission was aimed at making contact with those leading opposition to the rule of Libyan leader Muammar Gaddafi.
Most of the group were dropped by helicopter into eastern Libya on Friday but were later seized and taken to a military base in handcuffs by opposition fighters.
Witnesses said they were found to be carrying weapons, ammunition, maps and passports from four different countries, after the group had denied they were armed.
Following their release, they left for Malta on board HMS Cumberland on Sunday night.
Mr Hague told MPs on Monday: "Last week I authorised the despatch of a small British diplomatic team to eastern Libya, in uncertain circumstances which we judged required their protection, to build on these initial contacts and to assess the scope for closer diplomatic dialogue. I pay tribute to that team."
He added that the situation which led to their detention was "resolved" and they were able to meet opposition council president Mustafa Abdel Jalil, but "it was clearly better for this team to be withdrawn".
Mr Hague said the timing and details of the mission had been decided by professionals, but he took full ministerial responsibility for the operation and confirmed Prime Minister David Cameron had been aware in advance.
The prime minister's spokesman said it was still the government's intention to send diplomats to eastern Libya to make contact with opposition groups.
After fighting first broke out in Libya, the government was criticised for being slow to charter flights to bring home stranded Britons and creating confusion over the possibility of a no-fly zone.
Mr Alexander said: "After the events of this weekend and following the flights fiasco, twice in as many weeks ministerial decisions have generated an embarrassment that could all too easily have become a tragedy."
He went on to ask whether ministers were learning lessons from the "serial bungling" seen in recent weeks.
Former Liberal Democrat leader Sir Menzies Campbell called the operation into eastern Libya "ill conceived, poorly planned and embarrassingly executed".
And Labour's Denis MacShane asked the foreign secretary whether he was considering his position after "the present fiasco".
The British ambassador to Libya, Richard Northern, was called in to explain to opposition forces what the group was doing in eastern Libya.
He spoke to a spokesman for former justice minister, Mustafa Abdel Jalil, who is now a rebel leader, to explain the men's mission.
A telephone call between Mr Northern and Mr Jalil's spokesman was intercepted by the Gaddafi regime and excerpts were played on Libyan state television on Sunday.
In it, Mr Northern could be heard apologising for the "misunderstanding" and pleading for the men's release.
Oliver Miles, a former British ambassador to Libya, said he found the entire incident "bizarre".
He added: "The phone lines to the country still work so there's still quite a lot of information there if you're prepared to dredge for it.
"I'm glad that this particular episode seems to have ended in farce rather than tragedy."
He pointed out that Britain was not the only country to have experienced military embarrassment in Libya. The Dutch government is currently negotiating to free three of its marines who were captured along with their helicopter by pro-Gaddafi forces.
The troops had apparently been tasked with evacuating Dutch nationals from the port of Sirte.
BBC security correspondent Frank Gardner said of the British mission: "The problem was they had communications kit with them which they didn't want compromised. But now the situation is worse - they've presumably lost the kit and their helicopter.
"We've been told there'll be other efforts, but the next time they'll have to use the front door."
Forces loyal to Col Gaddafi have fought bitter clashes with rebels, with civilians bearing the brunt of the violence, according to the UN.
More than 600 British nationals have been evacuated from Libya, Mr Hague said. About 180 Britons remain there but many have said they intend to stay.
BBC correspondents in Libya say opposition forces are facing increasingly serious resistance from government forces as they move westwards from their stronghold in Benghazi.
Libyan air force pilots have also been involved in the fighting, strafing and bombing rebel targets.