Colombia will immediately free hundreds of militant fighters if the rebels release politician Ingrid Betancourt, who is in ill health after being held hostage for years in secret jungle camps, the government has said.

President Alvaro Uribe signed a decree last night allowing the massive release of rebels from jail if French-Colombian Betancourt, kidnapped during her 2002 presidential campaign and seriously ill with hepatitis B, is set free, Peace Commissioner Luis Carlos Restrepo told reporters.

The decree was a bid to speed up efforts at swapping dozens of rebel-held politicians, police and soldiers for jailed militants after months of haggling over conditions.

"The immediate release of Betancourt would be enough for us to consider the humanitarian exchange underway, in that we would conditionally suspend the sentences of guerrillas who are part of the agreement," Restrepo said.

The Revolutionary Armed Forces of Colombia, or Farc, is holding hundreds hostages for ransom and political leverage, including three American anti-drug contractors captured in 2003 and Ms Betancourt.

The Farc, which took up arms in the 1960s, and the government have been deadlocked over conditions for exchanging dozens of such high-profile hostages for rebels held in government jails.

"The legal basis for a humanitarian exchange has been established and we have reduced the requirements as much as possible," Mr Restrepo said.

Despite hard lobbying for a hostage swap by the families of kidnap victims and the French government, an agreement appeared less likely after Colombia killed the Farc's second-ranked commander in a March 1st raid carried out in neighbouring Ecuador.

Farc freed six hostages earlier this year in deals mediated by Venezuelan president Hugo Chavez.