The law issued last week is one in a series of laws the National Transitional Council, Libya's interim rulers, has recently issued to deal with the legacy of Gadhafi. The laws have come under criticism from international and local rights groups for violating freedom of speech or being too vague to enact.
The New York-based Human Rights Watch criticized the law passed last week which criminalizes spreading "false" news or "propaganda" that endangers the country's security or terrorizes people. Glorifying Gadhafi and his regime is considered such a crime, the new law says.
If the news leads to damaging the country, the crime is punishable by life in prison.
Human Rights Watch said the law fails to meet Libya's commitment to international human rights. It is also vague on the described offenses.
"This legislation punishes Libyans for what they say, reminiscent of the dictatorship that was just overthrown," said Sarah Leah Whitson, Middle East and North Africa director at Human Rights Watch. "It will restrict free speech, stifle dissent, and undermine the principles on which the Libyan revolution was based."
Salwa Fawzi al-Deghali, the top legal affairs official in the NTC, declined to comment, saying there was no formal complaints from the rights group.
The law also punishes anyone who "offends" the Libyan uprising, which began with protests on Feb. 17, until the capture and killing of Gadhafi last October. In a brief and vague article, the law says it also punishes those who offend Islam, the state's prestige or its institutions, the Libyan people or flag. There are no specifications of what constitutes an offense.
Human Rights Watch said under Gadhafi, criticizing him or his coming to power was punishable by death. Whitson said the new speech legislation was a "slap" to Libyans who fought for better human rights.
"It seems the NTC has done a 'cut and paste' job with the Gadhafi-era laws," Whitson said. "Libya's new leaders should know that laws restricting what people can say can lead to a new tyranny."
Human Rights Watch called on governments supporting Libya's transition, as well as the U.N. mission in Libya, to condemn the law, and any other attempts to restrict free speech, expression, and assembly.
Another law passed by the interim government has also caused concern among advocacy groups. The law regulates who can run for the country's upcoming elections to choose a 200-member assembly to form a government and prepare to write Libya's new constitution.
Rights groups say the law has set vague criteria for banning those associated with Gadhafi's regime from running. It prohibits people from running for office if they were "known to glorifying" the previous regime or if they "stood against" the uprising.