On 23 January, the newly promoted 10th Army commander, General
Giuseppe Tellera ordered a counter-attack against the British, to avoid an envelopment of XX Corps from the south. On 24 January the Babini Group, with ten to fifteen new M13/40 tanks, attacked the 7th Hussars as they headed west to cut the Derna–Mechili track north of Mechili. The British swiftly retired, calling for help from the 2nd RTR, which complacently ignored the signals. The British lost several tanks and knocked out two M.13s, until eventually, the 2nd RTR mobilised, caught the Italian tanks while they were sky-lined on a ridge and knocked out seven M.13s, for the loss of a cruiser and six light tanks. On 25 January in the north, the 2/11th Australian Battalion engaged the "Sabratha" Division and the 10th Bersaglieri Regiment of the Babini Group at Derna airfield, making slow progress against determined resistance. Italian bombers and fighters flew sorties against the 2/11th Australian Battalion as it attacked the airfield and high ground at Siret el Chreiba. The 10th Bersaglieri swept the flat ground with field artillery and machine-guns, stopping the Australian advance short of the objective. The 4th Armoured Brigade was ordered to encircle Mechili and cut the western and north-western exits, while the 7th Armoured Brigade cut the road from Mechili to Slonta but the Babini Group had slipped away from Mechili during the night. The group retreated south of Slonta to Bir Melez and Antelat, covering through sandstorms and air attacks, pursued by the 4th Armoured Brigade until it had to stop on the 28 January due to lack of fuel, exhaustion and the camel tracks turning to deep mud in the rains. On 26 January, Graziani ordered Tellera to continue the defence of Derna and to use the Babini Group to stop an advance westwards from the Mechili–Derna area. Tellera requested more tanks but this was refused until the defences of Derna began to collapse the next day. During the day, the 2/4th Australian Battalion in the Derna–
Giovanni Berta area, attacked and cut the Derna–Mechili road and a company crossed Wadi Derna during the night against bold Italian counter-attacks. On the northern edge of the wadi, a determined counter-attack with artillery support was made across open ground by the 10th Bersaglieri of the Babini Group, which, with reports in the morning that the group was attacking round the southern flank, deterred the Australians from continuing the advance on Derna but cost killed and During 27 January, Australian attempts to attack were met by massed artillery-fire, against which the Australian artillery were rationed to ten rounds per-gun per-day; the 2/4th Australian Battalion repulsed another battalion-strength counter-attack. A column of
Bren carriers of the 6th Australian Cavalry Regiment was sent south to reconnoitre the area where the Italian tanks had been reported and was ambushed by a party of the Babini Group with concealed anti-tank guns and machine-guns; four Australians were killed and three taken prisoner. On 28 January, the 11th Hussars found a gap at Chaulan, south of Wadi Derna, that threatened the Babini Group and the defenders in Derna with encirclement; General
Annibale Bergonzoli ordered a retirement. The Italians disengaged on the night of before the garrison was trapped; rearguards of the Babini Group cratered roads, planted mines and booby-traps and managed to conduct several skilful ambushes, which slowed the British pursuit. Derna was occupied unopposed on 29 January and the Australians began a pursuit along the
Via Balbia, closing on Giovanni Berta during 31 January. == See also ==