MADRID (AFP) - Extremists in Libya pose a "direct threat" to Europe, French Prime Minister Manuel Valls said in Madrid on Saturday.

"I would like to cite the question of Libya and the direct threat to our security of the creation - under our eyes and not far from our borders - of a new haven for the jihadi terrorist," Mr Valls told a gathering of social democrats in Madrid, according to a transcript of his speech.

Mr Valls' comments come amid growing concern that the Islamic State group, which has already seized swathes of Iraq and Syria, has also established a foothold in Libya.

The lawless North African country has become fertile ground for extremists following the ouster of dictator Muammar Gaddafi in 2011.

Analysts have warned that IS is expected to gain more strength in Libya, and said the international community was running out time to combat its spread there.

"The threat of Islamic State in Libya is set to increase exponentially," analyst Mohamed El-Jareh, from the Atlantic Council's Hariri Centre for the Middle East, said on Friday.

Since Gaddafi was killed, Libya's beleaguered authorities have been struggling to rein in powerful armed militias who are battling for power and the country's oil wealth.

Recent attacks in Libya claimed by Islamic State in Iraq and Syria have boosted concern that some militias have in fact pledged allegiance to the Sunni Muslim extremists.