Mr Cameron joined other world leaders - including representatives of several Arab states - at an emergency summit in Paris which agreed to deploy military aircraft to stop the assault on rebel stronghold Benghazi.
It comes after video footage showed a rebel fighter jet, believed to be a MIG, circling over the city before flames burst from its engine and it hurtled to the ground.
Colonel Gaddafi flouted his own ceasefire and the UN resolution by continuing heavy artillery bombardment on the eastern city as tanks were reported in the streets.
Shot down: The pilot ejects from the fighter jet as it hurtles to the
ground in flames over Benghazi
A split-second from impact: The jet is almost vertical as it plummets
to the ground at high speed. It is not known if the pilot survived
Split-second before impact: The jet is just feet above the ground as
the pilot can be seen at the top of the picture
Fireball: Smoke billows after the jet fighter crashes into the ground
in the west of the city
French President Nicolas Sarkozy announced that his country's air force was operating in the skies over Libya, while further French fighters stood ready to target Gaddafi's tanks and armoured vehicles.
Mirage and Rafale fighters were patrolling the skies above Benghazi and could be used to target Libyan tanks as they shell civilian areas of the city.
It was not immediately clear how soon the RAF's Typhoon and Tornado fighters will go into action, although the Dutch Prime Minister was reported to have said that UK, U.S. and French planes could be deployed later today.
Despite a ceasefire announced yesterday by Gaddafi's regime, artillery fire at opposition-held cities Benghazi, Misrata and Ajdabiya continued today.
Mr Cameron said it was clear the Gaddafi had violated the ceasefire and action was now needed 'urgently'.
'What is absolutely clear is that Gaddafi has broken his word, broken the ceasefire and continues to slaughter his own civilians,' said the Prime Minister after the summit ended.
Shelling: Smoke billows from a Benghazi suburb after rebels report
heavy artillery fire this morning. There were also reports jets had
bombed the road to the airport
'So I think it is vitally important that action takes place and action takes place urgently.
'Obviously at this time our thoughts should be with those who are going to risk their lives to help save the lives of others.
'I think it is vitally important that, with the UN behind us, with the clear legality of this action, and with local countries supporting us as well, it is right to act.'
He added: 'There will always be unforeseen consequences of taking action, but it is better to take this action than to risk the consequences of inaction, which is the further slaughter of civilians by this dictator flouting the UN and its will.
'He has lied to the international community, he has promised a ceasefire, he has broken that ceasefire, he continues to brutalise his people, and so the time for action has come.'
The rebel fighter shot down this morning was believed to have been hit by Gaddafi's forces, before crashing into the suburbs of Benghazi.
Residents said they had been under continuous bombardment since this morning.
Patrolling the skies: French Rafale jets, similar to these ones, are
flying above Benghazi and could be used to attack Gaddafi tanks
on the ground
Prepared: F-18 fighters are parked at the NATO airbase in
Aviano, Italy. International leaders have said Libya could face
military action if it refuses to comply with UN resolution
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Outstanding news
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