LIBYA: Libya reached agreement with the United States and Britain yesterday to accept civil responsibility for the 1988 Lockerbie bombing and compensate victims' relatives, a source close to the talks said.
The deal would end a lingering dispute between the West and an Arab state shortly before a likely US-led war against Iraq.
"History is in the making. A deal could be announced at any moment," the source said after the US Assistant Secretary of State, Mr William Burns, met Libyan and British officials in London.
Under the arrangement, Libya would compensate families of the 259 mostly American passengers and crew killed in the mid-air explosion of the Pan Am flight over the Scottish town of Lockerbie in 1988 and 11 people killed on the ground.
Tripoli would pay up to $10 million per victim into a special trust account in return for a series of steps to remove UN and United States sanctions against it, the source said.
That would make the total value of the settlement roughly $2.7 billion if all conditions were met. However, no official announcement was made last night, and the deal could not be confirmed.
A Libyan intelligence agent, Abdel Basset al-Megrahi, was convicted of the crime by a Scottish court sitting in the Netherlands. The source said a breakthrough in the talks came when Libya was convinced that it would be accepting civil liability for the acts of a state employee but not criminal responsibility for the Lockerbie bombing.
In Washington, a State Department official confirmed the London talks had taken place and said: "It was a useful session and we made further progress." But he declined to give details.
Family members said the State Department had invited Lockerbie victims' relatives to a meeting on Wednesday for an update on the issue.
The source said Tripoli would initially pay $4 million per victim into an escrow account once United Nations sanctions against Libya, suspended after the Lockerbie trial, were formally lifted.
Another $4 million would follow if the United States removed its national sanctions against Libya, which remain in force.
A final $2 million would be paid if Washington also repealed its Iran-Libya Sanctions Act.
If the United States failed to lift those measures within eight months, Libya would pay only $1 million extra into the account, limiting its total payment to $5 million per victim.
The source said the main breakthrough came at a meeting last Friday at which the two sides finalised the exchange of legal drafts.
The Libyan leader, Col Muammar Gadafy, said in an interview in Newsweek magazine published in January that he had no problem with paying compensation for Lockerbie, but the United States should also compensate Libyans for a 1986 bombing raid on Tripoli.
In London, Foreign Office officials played down the deal. A spokeswoman refused to give details of what she called a "useful session" of talks with the Libyans.
"We made further progress. Now the delegations are reporting back to the capitals to consult on the next stage," she said.
Speaking on behalf of some of the British families that lost relatives in the outrage, Mr David Ben Ayreah said the families had not received confirmation of the reports.
He added: "If the reports are true it is a welcome development. It does not further our search for the truth or indeed what happened before, during and after the murder of our loved ones."