SHISHAN, Libya (AFP/Reuters) - Anti-Gaddafi fighters played a waiting game Monday outside the besieged town of Bani Walid, as reports from Niger said prominent officials of the old regime had fled across the border. They included Moamer Gaddafi's internal security chief Mansour Daw, who was earlier reported to be in Bani Walid with at least two of the fallen strongman's sons, a Tuareg source in Libya's southern neighbour said. China meanwhile denied a Canadian press report that it had offered masses of arms to Gaddafi during the final months of his regime and held secret talks on shipping them through Algeria and South Africa. Negotiations for the surrender of Bani Walid southeast of Tripoli broke down late Sunday, Abdullah Kenshil, the chief negotiator for Libya's new government, the National Transitional Council (NTC), said. "I am leaving the military commander to resolve the problem," he said, but there were few signs that an assault was imminent Monday, as fighters fretted about the fate of civilians inside the oasis town. "We're still awaiting the decision of the NTC," operational commander Abdulrazzak Naduri told journalists at Shishan, north of Bani Walid. "They don't want any more bloodshed." Naduri said the Gaddafi loyalists, put at some 60 to 80 with no senior officers, were weak. "But some of them are hiding in local families they are using as human shields. We're afraid for the families in the town." "We'll be going through legal channels, through international courts, as well as the UN itself," Abdul Rahman Busin told Reuters. "Either to prosecute them or to come to a diplomatic understanding." Kenshil said civilians were being held hostage in the centre of the town, in administrative buildings and in five or six nearby villages. "Gaddafi's soldiers have also closed the gates of the town and are not letting families leave," he added. "That worries us, we don't want to kill civilians in the attack." In Beijing the foreign ministry admitted that Libyan officials had visited China in July for talks with "interested companies" but insisted that no arms contracts had been signed or exports made. "Chinese companies have not provided military products to Libya in any direct or indirect form. Chinese companies did not sign arms sales contracts and they did not export military products to Libya," spokeswoman Jiang Yu told journalists. Meanwhile, the military alliance's secretary general said on Monday that Nato's mission in Libya has moved significantly closer to success and will end soon.