Libya's parliament approved a budget on Wednesday for the government it appointed in March despite the incumbent administration refusing to step down, a move that may accelerate a return to parallel rule.
The budget passed by the parliament in the coastal city of Sirte aims to finance the government of Fathi Bashagha, who has been unable to enter the capital Tripoli to take over from an administration that rejects his appointment.
The 89.7 billion Libyan dinar ($18.6 billion) budget was approved unanimously, the parliament's spokesperson said.
The session was attended by 98 of 165 lawmakers. Another five voted in favor remotely, the spokesperson said.
The dispute over control of government and state revenue, and over a political solution to resolve 11 years of violent chaos, threatens to launch Libya back into administrative partition and war.
In Tripoli, Abdulhamid al-Dbeibah, installed last year through a UN-backed process to head an interim unity government, has said he will only step down after an election.
Underlining Libya's divide, parliament speaker Aguila Saleh told lawmakers that Tripoli was controlled by outlaw groups and there were "local and international parties" seeking to prolong the crisis.
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The Central Bank of Libya (CBL), which is based in Tripoli and is the only internationally recognized depository for Libyan oil revenues, finances Dbeibah's government.
Under previous agreements, however, it pays salaries across Libya's political divide including to fighters on different sides.
Lawmaker Saed Amgeb told Reuters that CBL Governor Sadiq al-Kabir would not be able to refuse to finance the budget, citing an agreement between parliament and Libya's High State Council.
Libya analysts say if the CBL refuses to fund Bashagha's budget, parliament may ask the head of its eastern branch to do so, effectively ending the CBL reunification process.
From 2014 to 2020, Libya was divided between warring eastern and western factions with a parallel government set up in the east with its own institutions including a central bank.
The effort to reunify Libya's banking system is seen as crucial to resolving underlying economic drivers of conflict and has been a major thrust of diplomacy, but has moved slowly.
The parliament is based in the east and largely supported commander Khalifa Haftar's war against Tripoli and western factions.
Meanwhile, eastern factions demanding that Dbeibah step aside have instigated a blockade of most Libyan oil output, with production falling to 100,000-150,000 barrels per day, according to the oil ministry.
Libya had been due to hold elections in December under a UN-backed peace process, but the vote was called off as factions could not agree on the rules. No new date has been set.