The British government decided two years ago it was "in the overwhelming interests of the United Kingdom" to make the Lockerbie bomber eligible for return to Libya, The Sunday Times newspaper reported.
Justice Secretary Jack Straw dropped his attempt to exclude Abdelbaset Ali Mohmet al-Megrahi from a prisoner transfer agreement after discussions between Libya and BP over a massive oil exploration deal became bogged down, it said.
The oil deal was resolved soon afterwards, according to the newspaper, which cited leaked letters sent by Straw to his Scottish counterpart.
In the event, Megrahi was released from his Scottish jail cell this month on compassionate grounds because he has terminal cancer. Scottish Justice Secretary Kenny MacAskill, who made the decision, rejected a prison transfer. However, the disclosure of the letters will raise questions about Britain's stance on the release of the only person convicted for killing 270 people when a Pan Am jet was blown up over the Scottish town of Lockerbie in 1988.
London has insisted the decision was made solely by the semi-autonomous Scottish authorities and rejected allegations that Megrahi was granted freedom as part of a deal to help facilitate contracts with oil-rich Libya.
In a letter to MacAskill dated July 26, 2007, Straw said he favoured an option to omit Megrahi from the prison transfer agreement by stipulating that any prisoners convicted before a specified date would be ineligible for transfer. On December 19, 2007, Straw changed his decision as Libya used its deal with BP as a bargaining chip to insist the Lockerbie bomber was included, The Sunday Times said.
Straw wrote to MacAskill: "I had previously accepted the importance of the al-Megrahi issue to Scotland and said I would try to get an exclusion for him on the face of the agreement. "I have not been able to secure an explicit exclusion.
"The wider negotiations are reaching a critical stage and, in view of the overwhelming interests of the United Kingdom, I have agreed that in this instance the (prisoner transfer agreement) should be in the standard form and not mention any individual." Within six weeks of this letter, the exploration deal, which had been signed in May 2007, was finally ratified by Libya, the Sunday Times reported.
BP denied that political factors played a role in the deal's ratification. In a statement responding to the report, Straw said the proposed exclusion of Megrahi from the prisoner transfer agreement (PTA) had been dropped because "it went beyond the standard form".
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