UPDATE 1-Anger, chaos but no revolt after Libya violence
* Signs of battle in town that turned against militiamen
* Local elders dismiss allegations they support Gaddafis
* Interim govt says ready to act, but sees clash "local"
* Conflict symptomatic of wider disarray across Libya (New throughout)
By Oliver Holmes
BANI WALID, Libya, Jan 24 (Reuters) - A bullet-scarred barracks, scorched and abandoned like the ageing tanks guarding its shattered gateway, was all that remained on Tuesday of what passed for the Libyan government's grip on Bani Walid.
But a day after townsmen put to flight a force loyal to the Western-backed interim administration in Tripoli, elders in the desert city, once a bastion of support for Muammar Gaddafi, dismissed accusations they wanted to restore the late dictator's family to power or had any ambitions beyond their local area.
"Allegations of pro-Gaddafi elements in Bani Walid, this is not true," said Miftah Jubarra, who was among dozens of leading citizens gathered at a local mosque to form a municipal council now that nominal representatives from the capital have fled.
"In the Libyan revolution, we have all become brothers," Jubarra told Reuters. "We will not be an obstacle to progress." Continued...