Lockerbie Bombing Deal Looks Imminent

A deal which would see Libya accept responsibility for the 1988 Lockerbie bombing and pay substantial compensation to the families of those who died appeared imminent last night.

Following talks in London between senior officials from Britain, the US and the Arab country, there was intense speculation that Libya was prepared to pay $10m (£6.6m) reparation to each family and accept civil responsibility for the bombing.

The US delegation was led by William Burns, a member of the US state department with responsibility for Middle Eastern affairs. He is due to meet the American relatives in Washington this evening.

UN sanctions against Libya, which were suspended following the Lockerbie trial, can only be lifted fully when certain criteria are met, including Libya making adequate compensation - estimated at $2.7bn - and the Tripoli regime accepting responsibility for the bombing.

Although Libya told the US relatives last year that it would be prepared to settle a civil action and pay the compensation, the issue of responsibility has been a stumbling block.

Libya had produced a statement on responsibility that was acceptable to Britain, but the US was unconvinced.

It now appears a compromise was agreed in London yesterday after Libya was convinced that it could settle the actions - and end sanctions - by accepting civil responsibility for the atrocity but not criminal responsibility.

A senior Libyan intelligence agent, Abdel Baset al-Megrahi, is serving 20 years in a Glasgow prison for planting the bomb which brought down PanAm flight 103 on December 21 1988. Following the rejection of Megrahi's appeal by five judges, sitting at a Scottish court in the Netherlands, the criminal investigation has ended.

The Libyan president, Muammar Gadafy, and his regime have refused to admit any involvement in the bombing, but the distinction between criminal and civil responsibility will allow Tripoli to have sanctions lifted without admitting fully its part in Megrahi's actions.

A Foreign Office spokeswoman would not be drawn on whether a deal had been made. She said: "We made further progress. Now the delegations are reporting back to the capitals to consult on the next stage."

But a source close to the talks told Reuters news agency: "History is in the making. A deal could be announced at any moment."

There is speculation that under the deal Libya will pay $10m into a trust for each of the 259 people who died on the plane and the 11 who were killed on the ground. In return, UN and unilateral US sanctions should be lifted.

Tripoli will pay $4m per victim into a neutral, escrow account once the UN sanctions, which crippled the country's oil and gas industries, are formally lifted.

Another $4m compensation will follow if the US removes its sanctions against Libya. A final $2m would be paid if Washington repealed its Iran-Libya Sanctions Act.

If the US failed to lift those measures within eight months, Libya would pay only $1m extra into the account, limiting its total payment to $5m per victim.

A spokesman for the British families said Libya accepting civil responsibility for the bombing would be a "welcome development".