The Brother Leader is alive and remains in Libya, one senior government source said. But he added that plans are on the table to spirit him out of the country to allow breathing space for a peace process led by the National Transitional Council which has now claimed control of most of the capital Tripoli.
Despite official denials, South Africa will play a key role in negotiations about Gaddafi's fate. It is not only one of most influential countries in the African Union, but its President Jacob Zuma was appointed the AU's chief mediator in the crisis and has visited Col Gaddafi twice since hostilities began in February.
A South African air force plane remains on standby in Tunisia and, the source said, the South Africans are ready to seek safe passage for Gaddafi with the help of neighbouring countries Tunisia or Algeria if he decided to leave.
"We are not going to walk away from this," the source told The Daily Telegraph. "It's larger than the question of Gaddafi the person. It's a question of the unity of the Libyans and the maximum chance being created for that process to happen."
Mate Nkoana-Mashabane, South Africa's foreign minister, has rejected reports that South Africa itself might be a venue for Gaddafi in exile.
The country has previously hosted former Haitian leader Jean-Bertrand Aristide and deposed Madagascan president Marc Ravalomanana but its signing to the ICC would cause difficulties were Gaddafi, who has been indited for crimes against humanity, to make it his home.
But the source said he believed that South Africa and other AU members due to meet to later this week would not necessarily shy away from helping Gaddafi into exile in a non-ICC signatory country, given the feeling that Nato had exceeded the terms of the UN resolution for a no-fly zone to protect civilian life.
South Africa, one of three African non-permanent members of the UN Security Council, voted in favour of the resolution but President Zuma later complained bitterly about it being abused "for regime change, political assassinations and foreign military occupation".
"How far the AU would want to get involved would also depend on the nature of the relationship with the UN mission," the source said. "So far the AU has been critical of the interpretation of the UN resolution and the AU has been marginalised in the process."
Professor Chris Landsberg, head of the University of Johannesburg's politics department and a guest lecturer at the Diplomatic Academy of South Africa's foreign office, said the scenario of African leaders helping Gaddafi evade the ICC was not unfeasible.
"I would not be surprised if the AU's position were: 'If we can prevent this leader from being killed we could prevent an already dire situation from spiralling out of control'," he said.
"I think the AU is likely, if Gaddafi is alive, to suggest that he should not be handed straight to the ICC. There is a growing feeling that the ICC is becoming an African tribunal and only pursuing African leaders."
Among the countries that are said to have expressed a willingness to receive Gaddafi are Venezuela, Cuba and Russia, another government source claimed.
"Pretoria is playing a very delicate and useful role to ensure he leaves the country through a safe passage, avoid a bloodbath for Tripoli, and end up in a safe haven such as Russia, Venezuela or Cuba," he said.
A third source said that Hugo Chavez's Venezuela was looking the most likely destination if Gaddafi were able to, and chose to, flee Libya. Hugo Chavez has condemned Nato operations in Libya as an attempt to seize control of the country's vast oilfields.
He spoke out in support of his friend early this morning, and last week a Venezuelan envoy was in Djerba, Tunisia, talking to Gaddafi representatives.
"Chavez would take him as a victim of Western Imperialism," the source said.
In a media briefing this morning, Mrs Nkoana-Mashabane said Gaddafi's fate would be determined by the Libyans alone.
"The Libyan people themselves need to decide what to do about the future of their country including the future of their leader," she said.
She rejected suggestions that the African Union's attempts to resolve the crisis with its own "road map" had failed.
"When the visitors leave, Africans will remain, dealing with an African problem ... the rebuilding of a country in their own region," she said.
"That's what makes the AU road map remain relevant, yesterday, today and tomorrow."
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