* Mo'tassim Gaddafi tried to escape in car with a family
* Gaddafi's men resisting from two small areas
* Civilians still emerging from the ruins of the town (Relead with Mo'tassim Gaddafi arrested)
By Ahmed Seif and Tim Gaynor
TRIPOLI/SIRTE, Libya, Oct 12 Libyan government fighters captured Muammar Gaddafi's son Mo'tassim in Sirte on Wednesday after he tried to escape the battle-torn city in a car with a family, officials with the National Transitional Council (NTC) told Reuters.
The capture of the deposed leader's national security adviser, and the first member of the Gaddafi family, is a big boost to Libya's new rulers whose forces are still battling pro-Gaddafi fighters in his home town of Sirte.
"He was arrested today in Sirte," Colonel Abdullah Naker told Reuters. Other NTC sources said Mo'tassim was taken to Benghazi where he was questioned at the Boatneh military camp where he is being held. He was uninjured but exhausted.
Hundreds of NTC fighters took to the streets in several Libyan cities and fired shots in the air in celebration after Arab television channels broadcast the news of his arrest.
Gaddafi loyalists have fought tenaciously for weeks in Sirte, one of just two major towns where they still have footholds, two months after rebels seized the capital Tripoli.
But NTC fighters have made significant advances in Sirte in recent days. On Wednesday they said they were fighting pro-Gaddafi fighters in two small areas in the city.
Many people who study Libya believe Mo'tassim belongs to a conservative camp -- rooted in the military and security forces -- which resisted his brother Saif al-Islam's reform attempts.
A senior NTC military official told Reuters that Mo'tassim had cut his usually long hair shorter to disguise himself.
Gaddafi and his most politically prominent son, Saif Al-Islam, have been on the run since the fall of Tripoli in August. Gaddafi himself is believed to be hiding somewhere far to the south in the vast Libyan desert.
His daughter Aisha, her brothers Hannibal and Mohammed, their mother Safi and several other family members fled to Algeria in August and have lived their since. Another son, Saadi, is in Niger.
'80 PERCENT UNDER OUR CONTROL'
NTC fighters in Sirte walked up the same battle-scarred streets strewn with empty ammunition cases where they had fought fierce clashes a day before. Other fighters searched damaged houses as a few civilians emerged from their basements.
"More than 80 percent of Sirte is now under our control. Gaddafi's men are still in parts of the Number Two and the 'Dollar' neighbourhoods," said NTC commander Mustah Hamza.
In the "Number Two" neighbourhood, government forces found 25 corpses wrapped in plastic sheets. They accused pro-Gaddafi militias of carrying out execution-style killings.
Five corpses shown to a Reuters team wore civilian clothes and had their hands tied behind their backs and gunshot wounds to the head.
"There are about 25 innocent people with their hands tied. There is no humanity. It's sad," said NTC commander Salem al Fitouri standing besides the corpses, which he said had been there for at least five days.
Green flags, the banner of Gaddafi's 42 years in power, still flew above many of the buildings in the neighbourhood, but all appeared quiet.
NTC fighters manoeuvred a tank into a small side street flooded with sewage from a burst pipe. It fired a few rounds at a large building up ahead, then infantrymen moved in, letting off bursts from their AK-47s as they advanced up the street.
At first, there was very little return of fire from the pro-Gaddafi side. But the government fighters had walked into an ambush. Hit by a hail of RPG and small arms fire, the NTC men scrambled back to safety, one nursing a wound to his hand.
Medical workers at a hospital outside Sirte said four NTC fighters were killed and 43 others were wounded on Wednesday.
The NTC has said it will start the process of rebuilding Libya as a democracy only after the capture of Sirte, a former fishing village transformed by Gaddafi into a showpiece for his rule, replete with lavish conference halls and hotels.
NTC chairman Mustafa Abdel Jalil said on a visit to Sirte on Tuesday that it would take two more days to take the town.
But the remnants of Gaddafi's forces, surrounded on three sides in Sirte and with their backs to the sea, have so far fought tenaciously, perhaps believing they face mistreatment or worse at the hands of their ill-disciplined foe.
Back from the front line, fighters from the National Transitional Council jostled with one another as one man tried to punch a wounded prisoner and others struggled to keep him off. The prisoner repeatedly shouted out that he was a civilian.
"But you had a gun," his captors said.
"I never used it," he said, fear in his eyes.
Any male of fighting age still in Sirte was under suspicion.
"We were staying in a basement," one man, Gamal Ammar, said alongside family members. "Some of us were hit. If we had died it would have been better. We had no water and no food. We couldn't get out." As NTC fighters drew near, he fell silent.
One man held up a passport and said: "I am Sudanese and I was not fighting." He was put in plastic cuffs and led away.
Gaddafi recruited large numbers of black Africans to his forces. NTC fighters often accuse every black man, including migrant workers, of having fought for the former leader.
Four other men being taken away on the back of a pick-up truck said they were from Chad and also denied taking part in the conflict.
NTC fighters pushed back reporters trying to talk to them. "They are liars, we found guns with them," one said. (Additional reporting by Barry Malone and Joseph Logan in Tripoli; Writing by Jon Hemming and Joseph Nasr; Editing by Michael Roddy)