LONDON (Reuters) - A Libyan military commander is suing former British foreign minister Jack Straw for authorizing his illegal transfer to Libya where he faced years of torture in Muammar Gaddafi's prisons, a lawyer for the commander said on Wednesday.

The action against an ally of former Prime Minister Tony Blair's ups the stakes in a debate over Britain's role in helping the United States to spirit suspected Islamist fighters across borders, often to face torture or ill treatment.

Lawyers acting for Abdel Hakim Belhadj, once a Libyan rebel fighter on the run who went on to help topple Gaddafi in 2011, say recent evidence indicates that Straw authorized British spies to allow Belhadj to be sent back to Libya without due legal process, something known as rendition.

"A letter of claim, the precursor to formal legal proceedings was served," Belhadj's lawyer, Sapna Malik, told Reuters. "The allegation is that he made the authorization of the rendition of our client," she said, adding that the letter had been served by email.

An aide to Straw, 65, declined comment.

Belhadj says he was arrested in 2004 with his pregnant wife in Malaysia and then transferred to Thailand where agents from the U.S. Central Intelligence Agency took them into custody and sent them back to Libya to face years of torture.

Now a powerful man in Tripoli, Belhadj says the United States was acting on a tip off from Britain's Secret Intelligence Service, known as MI6, and that the CIA used the British island of Diego Garcia in the Indian Ocean to refuel during the flight.

Belhadj is already suing the British government, the intelligence services and Sir Mark Allen, the former MI6 head of counter terrorism operations.

British ministers have denied knowledge of sending anyone to face torture abroad and London police are investigating whether Britain illegally sent detainees to Libya, though there has been no firm denial from the British government.

But the allegations have reopened a debate in Britain about the alliance with the United States and how far ministers in Blair's government went in helping the United States to track down Islamist fighters after the September 11 attacks.

A report in the Sunday Times quoted sources as claiming Straw, who as foreign minister is formally in charge of the foreign spy service, had personally authorized Belhadj's rendition to Libya.

Blair said this month he had no recollection of the Belhadj case but the legal action has tested even the steely nerves of Britain's spy chiefs who now have to ponder whether their decisions will one day be the subject of legal action.

(Reporting by Avril Ormsby, Guy Faulconbridge and Limei Hoang)