It is the latest dramatic phase in the turmoil sparked by the assassination of General Abdel Fatah Yunis -- amid his return to Benghazi under arrest in late July.
The NTC has come under fire for its role in events leading up to Yunis's death, as well as its handling of the aftermath.
Although details are sketchy and still under investigation, it is known that an arrest warrant was signed by senior NTC executive member Ali Essawy, raising allegations that the NTC unknowingly helped facilitate his murder.
Essawy was one of the most visible members of the rebel government -- the interlocutor for visiting foreign dignitaries.
The rebel defence minister, Jallal al-Digheily -- also in the executive office -- and his second in command have also been slammed for continuing a foreign trip when news of Yunis's arrest emerged.
Since then, the council has faced angry and sometimes violent protests from Yunis's tribe, as well as demands for reform from groups that were at the forefront of the February 17 revolution.
Before Monday's announcement Jalil had insisted that a criminal investigation was under way and promised that an internal investigation into the NTC's management of the crisis would not flinch from apportioning blame.
"No one is above the law, starting from the top of the NTC," he said.
El-Kish said Jalil's decision on Monday came as a result of that internal investigation.
The urgency of the dual probes had only been exacerbated by pressure from Yunis's Obeidi tribesmen for quick justice and even retribution.
Since the general's death, tribal tensions have come to the surface in a country where clans for decades have formed the basis for solving disputes in the absence of functioning judicial institutions.
But Jalil's decision could also fuel political tensions.
Insiders have reported frequent clashes between the NTC, whose members were largely Libyan-based lawyers and former members of Moamer Kadhafi's regime and the executive branch, the majority of whom were exiles.
The news could also come as a distraction to rebel fighters who were battling to defend their gains in the west, in the face of an offensive by troops loyal to Kadhafi.
Rebels fighting at Zliten, 120 kilometres (75 miles) to the east of Tripoli, admitted they were running low on ammunition as they struggled to hold off an assault by loyalist forces.
Abdul Wahab Melitan, a rebel spokesman in the port city of Misrata near Zliten, said Kadhafi forces had launched an assault on their positions on Sunday in the Souk Telat area.
Since then, he said, four rebel fighters had been killed and 40 wounded. "The rebels lack ammunition to advance and we do not want to risk losing any ground," Melitan said.
NATO in Brussels said alliance warplanes hit eight targets in the Zliten area on Sunday -- four command and control nodes, one military facility, a weapons dump, an anti-tank weapon and a multiple rocket launcher.
The alliance also said it hit four targets in the area of the eastern oil hub of Brega and five in Tripoli, a day after a heavy bombardment of the city.
Meanwhile, rebels held onto Bir Ghanam early on Monday, an AFP journalist said. "The rebels are controlling the checkpoints. There are no shots," the journalist said, adding that NATO warplanes were overhead.
In Tripoli, Prime Minister Baghdadi Mahmudi earlier told reporters that government troops had recaptured the town. "Life is back to normal in Bir Ghanam, and today it is under the full control of the regime," he said.
Mahmudi also condemned the intensification of NATO raids on Tripoli and other cities, claiming that the alliance no longer "differentiates between civilian and military sites."
NATO also received criticism from UNESCO.
The head of the cultural organisation Irina Bokova branded as "unacceptable" NATO strikes on Libyan state television headquarters last month, which left three people dead, saying the media should not be a target.