Libya Offers Cash to Quit 'axis of Evil'

Libya will ask to be removed from Washington's "axis of evil" list after it has paid the families of the 270 victims of the Lockerbie bombing $10m (£6.3m) each, its foreign minister, Abdel Rahman Shalgham, told the Agence France Press news agency yesterday.

"Libyan businessmen" had already set up a fund for the compensation, he said, and he hoped the damages would be paid soon, "perhaps in the coming weeks".

The amount, $2.7bn (£1.7bn), chimes with what US officials claimed Tripoli had offered in talks with Britain and the US in March when Libya admitted civic responsibility for the 1988 atrocity. Many relatives, however, have been pushing for an admission of full responsibility for the downing of PanAm flight 103.

Mr Shalgham said the payment was conditional on United Nations sanctions against Libya being lifted after payment of an initial $4m to each family, and US sanctions being taken away after another $4m payment.

After the final $2m payment, Tripoli hoped to be removed from the US list of states sponsoring terrorism.

UN sanctions against Libya were suspended but not lifted after Tripoli handed over two Libyan suspects. A Libyan intelligence agent, Abdel Basset al-Megrahi, was later convicted of the bombing by a Scottish court sitting in the Netherlands.

It was not clear if Libya's compensation offer was contingent on legal actions against the government by individual families of the victims being dropped.

A Foreign Office spokeswoman said: "In light of this latest report we will be looking forward to further dialogue with the Libyan government."