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Prosecutors have said that the suspect was one of two alleged Libyan traffickers jailed in Catania after the shooting earlier this month, which occurred before an NGO boat rescued the migrants.

Catania police said the victim, from Sierra Leone, failed to understand the orders shouted in Arabic by the smugglers to stay seated and remove hats.

Authorities alleged one of the Libyans was "involved" in the slaying but said the identity of the man who fired the gun was unknown.

Libya's coastguard on Wednesday intercepted a wooden boat packed with almost 500 migrants after duelling with a German rescue ship and coming under fire from traffickers.

The migrants, who were bound for Italy, were picked up off the western city of Sabratha, said Libyan navy spokesman Ayoub Qassem.

The German non-governmental organisation "Sea-Watch tried to disrupt the coast guard operation... inside Libyan waters and wanted to take the migrants, on the pretext that Libya wasn't safe," Qassem told AFP.

Sea-Watch posted a video on Twitter of what it said was a Libyan coastguard vessel narrowly cutting across the bow of its ship.

"This EU-funded Libyan patrol vessel almost crashed (into) our civil rescue ship," read the caption.

Qassem also said the coastguard had come under fire from people traffickers, without reporting any casualties.

The 493 migrants included 277 from Morocco and many from Bangladesh, said Qassem, and 20 women and a child were aboard the boat. All were taken to a naval base in Tripoli.

There were also migrants from Syria, Tunisia, Egypt, Sudan, Pakistan, Chad, Mali and Nigeria, he added.

According to international organisations, between 800,000 and one million people, mostly from sub-Saharan Africa, are currently in Libya hoping to make the perilous Mediterranean crossing to Europe.

Between 7,000 and 8,000 migrants are being held in Libyan detention centres after entering the country illegally, an immigration official said on Tuesday.

The North African country has long been a stepping stone for migrants seeking a better life in Europe. Smugglers have stepped up their lucrative business in the chaos which has engulfed Libya since its 2011 revolution.