The EU is looking to mothball its Libya border-control mission despite concerns about foreign fighters and irregular migrants website EUObserver reported.

Launched in May 2013, but parked in Tunisia since July last year due to fighting in Tripoli, the €26-million a year operation - Eubam Libya - has had little opportunity to make an impact.

The need for it is greater than ever - the EU recently named Libya as the main source of small arms smuggling to Europe and as a potential source of returning European jihadists, while the number of migrant sea-crossings hit an all-time high in 2014.

But an EU options paper on Libya circulated last week indicates Eubam has a bleak future.

The paper, drafted by the EU's external action service for today's foreign ministers' meeting, says, according to an EU source familiar with the text, that "in the current circumstances it would appear that suspending the mission (i.e. effectively putting it on hold with much reduced mission personnel) could offer the most political flexibility, providing of course that the situation does not deteriorate further. In the latter event, closure could quickly become obligatory".

It notes that Eubam's so-called Peacock Compound in Tripoli should be "dispensed with".

It proposes the EU could instead try to help Libya's neighbours - Algeria, Tunisia, Egypt, Niger, Chad, and Sudan - to seal their borders and "focus" on maritime surveillance and search and rescue.

It also says member states could extend bilateral counter-terrorist operations in neighbouring countries.

The EU foreign service on Saturday welcomed "initial progress" in peace talks between rival Libyan warlords held in Geneva.

But, according to the EU source, the options paper paints a worrying picture of the situation on the ground.

It describes the status quo as one of "continuation of a dialogue process, interrupted by violent actions on both sides, preventing conclusion on any serious agreement".

It also warns of a possibility of "full civil war resulting in anarchy and widespread conflict drawing in many other factions and tribes and triggering a response from regional actors".

One measure of the conflict is Libya's shrinking oil output.

It used to deliver 1.4 million barrels a day to world markets before the war, slipping to 900,000 last November and just 200,000 today.

The options paper suggests the EU could send more experts to support the UN mission in Libya; blacklist people who act as "spoilers" to the peace process; and encourage the International Criminal Court in The Hague to launch actions against the same individuals.

It notes, the EU source said, that "some key partners are leading on detailed preparatory work ... to prevent exploitation of Libyan financial resources for military or political purposes (including possible funding of international terrorism)".

One idea is to put Libya's financial assets under international supervision, with international bodies to pay public sector salaries.

The most far-reaching options include imposing a UN-level oil embargo and putting foreign troops on the ground.

But, according to the EU source familiar with the paper, it warns this could have unpredictable consequences.

"This option [the oil embargo] should be considered with the greatest caution as it would take a heavy toll on the Libyan economy and society, and may trigger unforeseen reactions", it says.

"The more far-reaching measures entail serious risks, including attempts by militias to seize control of assets, a strong response from the Arab world (and Russian) against foreign intervention, and reduced willingness to proceed with the (UN-led) mediation process".

With some member states calling on the EU to take steps against Russian propaganda on Ukraine, the Libya paper also says Libyans need better access to information.

The EU source said the paper warns that "national radio and television stations have been pressured to broadcast according to the views of the authorities in power in their area. This fuels the polarisation process, triggers decisions based on false information and prevents reconciliation".

The paper adds: "The EU could further explore options for an independent neutral public broadcaster for Libya, in a secure manner not to put the journalists at risk, initially through social media/internet".

"The EU through its co-operation with Deutsche Welle and the BBC are looking into the feasibility of this option".