Libya's militias have captured most government ministries in the capital, Tripoli, the government has said.
Armed men had blocked staff from entering offices, it added in a statement.
On Sunday, militiamen seized the US embassy, with videos showing cheering men diving from a balcony into a swimming pool.
Meanwhile, Abdullah al-Thinni has been reappointed as prime minister after he resigned last week.
Libya has been hit by anarchy since Col Muammar Gaddafi was overthrown by the militias, backed by Western countries, in 2011.
The militias have been fighting for power among themselves since then, with an Islamist-linked group, Libya Dawn, capturing Tripoli last week.
Senior government officials and the elected parliament moved to the eastern city of Tobruk, more than 1,000km (620 miles) away, last month for security reasons.
"We announce that most ministries, institutions and state bodies in the capital Tripoli are out of our control," the government statement said.
The US and other countries evacuated their embassy staff in July, as fighting escalated for control of Tripoli.
Libya's central bank and the state oil company are based in the city.
The House of Representatives, elected in July, said it had reappointed Mr Thinni, who would now form a new, streamlined government.
The elections were the second since Col Gaddafi was killed in the 2011 revolution, but hopes that the polls would help restore stability in Libya have failed to materialise.
Libyan Dawn has called on the previous parliament, the General National Congress, to reconvene but the UN has said it will only back the elected body.
Battle for Libya:
Misrata-led alliance (Libya Dawn):
- Effectively in control of Tripoli
- Includes some Islamist militias, such as LROR
- Also Libya Central Shield
- Called on former parliament, GNC, to reconvene
- Had controlled Tripoli airport for three years
- Includes al-Qaqa Brigade and al-Sawaiq Brigade
- Al-Qaqa had officially joined the national army but remained autonomous
- Supports new parliament
- Loosely allied with rogue General Haftar