China has confirmed that representatives of Libyan dictator Moammar Gadhafi visited the country during the final months of Gadhafi's regime, in a bid to buy arms. But Beijing insists the talks took place without government knowledge.

According to newly revealed documents, state-controlled Chinese arms makers were prepared to sell $200-million worth of weapons and ammunition to the Gadhafi reps.

The Globe and Mail reported last week that it had obtained documents detailing the negotiations between the reps and China North Industries Corp., China Precision Machinery Import and Export Co., and China Xinxing Import and Export Co.

The Chinese government confirmed on Monday that the representatives visited China, but insisted that no weapons were delivered. Foreign Ministry spokeswoman Jiang Yu told reporters Monday at a press briefing that while Gadhafi's officials met with representatives from the companies, no contracts were finalized.

She said China strictly adheres to a United Nations ban on supplying arms to the toppled regime and backed the role of the UN in a post-conflict Libya.

"Chinese companies have not provided military products to Libya in any direct or indirect form," Jiang told reporters at the briefing.

Yet a spokesman for the Libyan opposition, Abdel Raham Busim, said there is evidence that Chinese companies shipped weapons through Algeria to Gadhafi's forces.

If the reports prove true, those sales would have been a clear violation of a United Nations arms embargo.

CTV's Ben O'Hara-Byrne, who was at the Chinese government press conference on Monday, says the incident "seems to have caught China off-guard a little bit."

He adds that it is possible that China's government did not know about the alleged transactions -- or at least its minister of foreign affairs did not.

"Keep in mind, of course, that China's government is not China's ruling party; there are two separate structures in this country: the government and the Communist party. So different people know different things," O'Hara-Byrne told Â鶹´«Ã½ Channel Monday morning from Beijing.

"I think there will be a lot of questions about who knew what was going on and why. Whether anybody will ever find out is unclear."

Busim told the Associated Press that documentation was still being collected but that the new government was considering bringing legal action against Beijing, possibly at the United Nations.

The revelation could further damage Beijing's relations with the new opposition government in Tripoli. O'Hara-Byrne notes the Chinese government was very close with Gadhafi's regime, and the country did a lot of business there, including importing oil from Libya.

As well, China has not been a warm supporter of the rebels since the beginning of the uprising.

"They've been quite critical of NATO action, they haven't recognized Libya's new government yet – one of the few countries not to do so," he said.

He says while this incident will be embarrassing for China, it's unlikely the new Libyan government will be able to cut China off completely, because of the huge economic power the country now wields on the world stage.

With reports from the Associated Press