DHAHRA Street in central Tripoli isn't much to look at. On one side is the state-owned Mellitah oil company. Opposite is an unprepossessing three-storey block of faded stucco where Wissam al-Aqari's little grocer's shop occupies the corner unit.

What catches the eye these days is an Arabic sentence scrawled across a wall next to the shop: “This building is the rightful property and inheritance of Muhammed al-Jafairya.”

Such claims of ownership can be seen all over Tripoli and across the country. Just how the original owners will get back — or be compensated for — the billions worth of lost properties is one of the toughest questions facing Libya's new rulers.

The issue of restitution goes back to the late 1970s when tens of thousands of homes, offices and other premises were confiscated under law No 4 — and were given, sold or rented cheaply to new occupants whose rights were legitimised by the homespun revolutionary truths of Muammar Qadhafi's Green Book.

Aqari is no squatter: he pays rent. But that's only because Jafairya has already managed to reclaim two of the shops in the Dhahra Street building, though its apartments — posing even more thorny legal issues — remain beyond his reach.

Sami Zaptia, a consultant whose family owned an apartment block in Hay Dimashq, calls the restitution issue a Pandora's box because of its complexity and potential knock-on effects. “The Qadhafi lot cottoned on and sold on a lot of what they had sequestered — and then the people they sold it to sold it on too,” he says. “How do you disentangle that?”

The question has resurfaced, occasionally violently, since the regime fell in August. In several cases armed fighters have seized property and returned it to its original owners.

Mustafa Abdel-Jalil, chairman of the ruling National Transitional Council, has announced that the courts are open to adjudicate claims. But nothing has happened yet — in part because the judiciary is compromised by its old loyalties.

Compensation for confiscated property or lost rent did become available during the brief reformist period of Qadhafi's son, Saif al-Islam. But few were satisfied with payments that averaged about a quarter of market value. “The theory was that you could get compensation but in practice they only offered a tiny amount,” says Abdel-Hakim Qaddah, a businessman whose wealthy father had several buildings confiscated and was later imprisoned.

Muhannad al-Amiri's father was one of those who did settle: “It was a trivial amount. We should have held out.”

A favourable court order was not always the end of the story. “Even if you did get awarded compensation and accepted it you still had to bribe someone to make sure the money was actually paid into your bank account,” says another claimant.

It can be farcical: in Gargarish, a smart area of Tripoli, one man regularly visits his family's confiscated villa and spray paints “this property has seen stolen from its rightful owner” on the wall — only for the occupant to paint over it. The family obtained a court ruling in its favour some time ago but it was never implemented because the interloper had official 'connections'. — The Guardian, London