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But he said securing Russian and Chinese agreement for such a move would "take some negotiation".
Opposition forces in Libya are continuing to hunt for Col Gaddafi.
Defence Secretary Liam Fox confirmed earlier that Nato was providing intelligence and reconnaissance support to help track him down, along with the other remnants of his regime.
But Mr Fox declined to comment on a report in the Daily Telegraph that British special forces are on the ground and helping with the hunt.
The rebels have put a $1.7m (£1m) bounty on Col Gaddafi's head.
'No way back' The government's National Security Council meeting - the fourth on consecutive days - discussed the humanitarian situation in Libya, including concerns about a lack of clean water for inhabitants.
It also discussed work going on at the United Nations to unfreeze Libyan assets, and the efforts of the opposition political body, the National Transitional Council (NTC), to formally establish a presence in the capital Tripoli.
Afterwards, Mr Hague said: "The Gaddafi regime is finished. There is no way back for the Gaddafi regime and clearly many of its key members are on the run."
But he said there remained several thousand fighters loyal to Gaddafi and "huge numbers of weapons" at large in the country.
"There is a danger that they will try to continue to fight," he said, but he insisted the loyalists were in a "steadily worsening position" as the rebels continued to advance. The UK has taken a lead role in five months of Nato air strikes against the apparatus of the Gaddafi regime, in accordance with a UN mandate to protect Libyan civilians.
The defence secretary said Nato had been "more active" on Wednesday than on previous nights in attacking "the resisting elements of the regime".
Among the assets targeted around Tripoli were two military storage facilities, two anti-aircraft guns and several vehicles.
Mr Fox said British military advisers remained in Libya, helping the rebels with "communications, logistics, the chain of command and so on", but he again insisted there were "absolutely no plans to have any British boots on the ground".
International diplomacy The UN sanctions committee released $500m of frozen Libyan assets on Wednesday night following a request by the United States. The money will go to humanitarian agencies.
But the release of a further $1bn was blocked by South Africa, which said it wanted to wait for guidance from the African Union, which has not recognised the rebel leadership as Libya's legitimate authority.
A Downing Street spokeswoman said Prime Minister David Cameron - who is on holiday in Cornwall - had spoken to South African President Jacob Zuma on Thursday morning.
"They agreed that Libya now has the opportunity for transition to a peaceful, democratic and inclusive government and they discussed how the international community should actively and urgently support this process," she said.
"The prime minister welcomed South African support of the release of $500m of frozen Libyan assets for humanitarian needs, and the leaders agreed that the African Union needs to take swift decisions at their summit in Addis Ababa today on the unfreezing of further assets."
Earlier, Mr Fox said South Africa's apparent stalling was "disappointing" and there was "a huge moral pressure" on the country's leadership to "stand with the Libyan people".
The BBC's political correspondent Ross Hawkins said South Africa did not have the power to block a wider unfreezing of Libyan assets - £12bn of which are in London alone.
If, as reports suggest, the US presents a draft resolution on unfreezing to the UN Security Council later, South Africa could not block that proposal - but its leaders say other countries do have reservations about the release of the money.
Mr Hague said British diplomats - alongside those from France and the US - were working to obtain agreement from Russia and China - both of whom have a Security Council veto.
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"Now that is something that should be supported by the UN Security Council but this will take some negotiation. It will take some time. I can't say yet when it will be possible to pass such a resolution."
Rebels are continuing to fight running battles with pro-Gaddafi forces in Tripoli, despite overrunning the leader's compound on Tuesday.
Col Gaddafi is also believed to retain a strong following in two other cities - Sirte, his hometown 450km (280 miles) to the east of the capital, and Sabha, 650km to the south in the desert.
He has vowed in an audio message to fight until victory or martyrdom.
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