Liberian President Charles Taylor has lifted the state of emergency imposed eight months ago after rebels began threatening the capital, Monrovia.

Speaking after the recapture of the north-western town of Bopolu on Friday, Mr Taylor said he had taken the decision because of the reduced danger from rebels.

Thousands have been displaced by prolonged fighting

There was applause from ministers and officials in the presidential mansion as Mr Taylor made the announcement in a special nationwide address.

He also declared an end to a ban on all public gatherings and political rallies which he claimed had been imposed as part of necessary security measures against the rebels.

However at the time many accused Mr Taylor of over-reacting and using the rebel threat as a pretext to suppress political opposition.

The conflict has led tens of thousands to seek refuge at camps within Liberia, while many others have fled abroad.

Claims contested

Mr Taylor said he was confident his actions would contribute greatly to the search for lasting peace and reconciliation, and would spur preparations for general elections next year.

He also said all areas previously occupied by the rebel Liberians United for Reconciliation and Democracy (Lurd) had now been retaken, with the exception of parts of the northern city of Voinjama.

However a spokesman for the Lurd, William Hanson, denied that Bopolu, which rebels seized in February, had been captured.

Taylor won elections but now faces security problems

He also said the lifting the state of emergency made no difference.

Forces loyal to President Taylor have been fighting rebel factions in the north of the country since 1999.

The Lurd says it will not stop fighting until it ousts President Taylor, himself a former warlord.

Government ministers have complained that the army is fighting an unfair war because of an international ban on selling weapons to the Liberian Government.

Correspondents say the timing of President Taylor's announcement could be linked to plans for a high-powered meeting on the sidelines of the UN General Assembly in New York to discuss international sanctions imposed on Liberia since May last year because of alleged gun-running to Sierra Leone rebels.