Tripoli has stopped issuing visas to citizens of the Schengen passport-free zone, which includes most of the European Union as well as Switzerland, in retaliation for Berne's decision to bar entry to some Libyans including the country's leader Muammar Gaddafi and his family.
Italy, which has close business links with Libya, accused Switzerland of misusing the Schengen agreement and taking its members "hostage" by imposing the ban, which had forced other states to bar travel by Libyans as well.
Speaking on the sidelines of a meeting of European Union interior ministers, Italy's Roberto Maroni said the row put the Schengen zone at risk and could further strain relations with Libya.
Cooperation by Tripoli in controlling immigration to the EU was one issue, he said.
"The fear is in part that [...] Libya could weaken its border controls concerning illegal immigration," he told reporters.
The EU has offered Libya 20 million euros ($26.95 million) to help it cope with the flow of illegal migrants who often use the country as a departure point for southern Europe, particularly Italy.
Rome also signed a cooperation agreement with its former North African colony last year to curb migration across the Mediterranean by setting up joint patrols.
Swiss Justice Minister Eveline Widmer-Schlumpf attended a meeting with EU ministers on yesterday to discuss possible solutions to the travel row.
She reiterated Swiss denials that Berne had misused Schengen deals but declined to offer any details on yesterday's talks.
A Swiss businessman was given a jail sentence after a visa standoff.
(EurActiv with Reuters.)