Libyan rebel commander Gen Abdel Fattah Younes was shot dead by a militia linked to his own side, a rebel minister has said.
Ali Tarhouni said Gen Younes was killed by members of the Obaida Ibn Jarrah Brigade, which is an Islamist group.
Gen Younes defected to the rebels in February after serving in the Libyan leadership since the 1969 coup which brought Col Muammar Gaddafi to power.
Meanwhile Nato says it bombed Libyan state TV transmitters overnight.
The Libyan Broadcasting Authority said three of its technicians were killed and 15 other people injured in the attack in the capital, Tripoli.
The alliance said it had disabled three satellite transmission dishes through a "precision air strike".
It said the operation was intended to stop "inflammatory broadcasts" by Col Gaddafi's government.
Nato said the strike would "reduce the regime's ability to oppress civilians" but also "preserve television broadcast infrastructure that will be needed after the conflict".
Libyan state TV was still on air following the Nato statement.
'Slap in the face'
Oil minister Tarhouni told reporters in Benghazi a leader of the militia had provided information on the circumstances of Younes' death.
Mr Tarhouni said Younes and two of his aides were killed after being recalled to the rebel stronghold for questioning.
Younes' shot and burned body, and the bodies of his aides, were found on the edge of Benghazi on Friday.
"His lieutenants did it," Mr Tarhouni said, adding that the killers were still at large, Reuters news agency reported.
The minister did not provide a motive for the killing, which he said was still being investigated.
Col Gaddafi's government said the killing was proof that the rebels were not capable of ruling Libya.
Government spokesman Moussa Ibrahim said: "It is a nice slap [in] the face of the British that the [rebel National Transitional] council that they recognised could not protect its own commander of the army."
Mr Ibrahim also said Younes was killed by al-Qaeda, repeating a claim that the group is the strongest force within the rebel movement.
"By this act, al-Qaeda wanted to mark out its presence and its influence in this region," he said.
"The other members of the National Transitional Council knew about it but could not react because they are terrified of al-Qaeda," he added.
Middle East analyst Shashank Joshi said the concern that emerges most sharply from the incident is not so much that the National Transitional Council will splinter before Tripoli falls, but that it might do so afterwards.
The general - Col Gaddafi's former interior minister - joined the rebels at the beginning of the Libyan uprising in February.
The BBC's Ian Pannell in the rebel-held city of Misrata says the death will feed international suspicions that the rebels cannot be trusted.