UK pays out to family "rendered" to Gaddafi's Libya
* Legal charity says UK role came to light after Gaddafi ousted
* Foreign Office says no admission of liability
* Saadi says should be public inquiry
LONDON, Dec 13 (Reuters) - The British government agreed to pay more than 2 million pounds($3.2 million) on Thursday to the family of a leading opponent of the late Libyan leader Muammar Gaddafi who says Britain was involved in his rendition to Tripoli where he was tortured.
Sami al-Saadi, who had for years tried to avoid Gaddafi's agents, was abducted with his wife and four young children in Hong Kong in 2004, forced onto a plane and flown to Libya where they were all imprisoned.
Saadi was then tortured for years following the joint British-U.S.-Libyan operation, said British legal charity Reprieve, who were involved in his case.
The charity said Britain's role in the rendition only came to light in 2011 after Gaddafi was ousted from power, when correspondence between the U.S. Central Intelligence Agency (CIA) and Libyan intelligence was found by Human Rights Watch in the office of Gaddafi's former spy chief Moussa Koussa.
"We (CIA) are ... aware that your service had been cooperating with the British to effect (Saadi's) removal to Tripoli ... the Hong Kong Government may be able to coordinate with you to render (Saadi) and his family into your custody," the correspondence said, according to Reprieve.
Reprieve said Britain had now agreed to pay Saadi and his family 2.2 million pounds.
The rendition occurred when Britain's relations with Libya thawed during Tony Blair's period as prime minister. He visited Libya in 2004 and announced that Gaddafi was ready to help Britain's fight against terrorism.
"We can confirm that the government and the other defendants have reached settlement with the claimant," said a Foreign Office spokesman. "There has been no admission of liability and no finding of any court of liability."
Members of the British domestic intelligence agency MI5 and its foreign equivalent MI6 have for years faced accusations they had colluded in the ill treatment of detainees, often at the hands of U.S. authorities.
The issue was so serious Foreign Secretary William Hague said last year that Britain's international standing had been damaged by the allegations.
Saadi said there should be a public inquiry into his case and others like him who say they were rendered to Libya with British cooperation.
"Even now, the British government has never given an answer to the simple question: 'Were you involved in the kidnap of me, my wife and my children?'" Saadi said in a statement.
Abdel Hakim Belhadj, a Libyan Islamist leader who says he also suffered years of torture after British agents secretly handed him over to Gaddafi's government in 2004, said he would continue his legal action against the government and MI6.
"I intend to fight to ensure the truth is told. I have said before, and I say again now, my wife and I will not allow the truth to be concealed," he said. "We look forward to giving evidence at trial, and seeing those responsible for our torture and that of Sami and his family held to account."
British police announced in January that they would investigate Belhadj's allegations to see if British spies were guilty of any criminal offences.
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