The British government decided it was “in the overwhelming interests of the United Kingdom” to make Abdelbaset Ali Mohmed al-Megrahi, the Lockerbie bomber, eligible for return to Libya, leaked ministerial letters reveal.

Gordon Brown’s government made the decision after discussions between Libya and BP over a multi-million-pound oil exploration deal had hit difficulties. These were resolved soon afterwards.

The letters were sent two years ago by Jack Straw, the justice secretary, to Kenny MacAskill, his counterpart in Scotland, who has been widely criticised for taking the formal decision to permit Megrahi’s release.

The correspondence makes it plain that the key decision to include Megrahi in a deal with Libya to allow prisoners to return home was, in fact, taken in London for British national interests.

Edward Davey, the Liberal Democrat foreign affairs spokesman, said: “This is the strongest evidence yet that the British government has been involved for a long time in talks over al-Megrahi in which commercial considerations have been central to their thinking.”

Two letters dated five months apart show that Straw initially intended to exclude Megrahi from a prisoner transfer agreement with Colonel Muammar Gadaffi, under which British and Libyan prisoners could serve out their sentences in their home country.

In a letter dated July 26, 2007, Straw said he favoured an option to leave out Megrahi by stipulating that any prisoners convicted before a specified date would not be considered for transfer.

Downing Street had also said Megrahi would not be included under the agreement.

Straw then switched his position as Libya used its deal with BP as a bargaining chip to insist the Lockerbie bomber was included.

The exploration deal for oil and gas, potentially worth up to £15 billion, was announced in May 2007. Six months later the agreement was still waiting to be ratified.

On December 19, 2007, Straw wrote to MacAskill announcing that the UK government was abandoning its attempt to exclude Megrahi from the prisoner transfer agreement, citing the national interest.

In a letter leaked by a Whitehall source, he wrote: “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 with the Libyans are reaching a critical stage and, in view of the overwhelming interests for 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 the government climbdown, Libya had ratified the BP deal. The prisoner transfer agreement was finalised in May this year, leading to Libya formally applying for Megrahi to be transferred to its custody.

Saif Gadaffi, the colonel’s son, has insisted that negotiation over the release of Megrahi was linked with the BP oil deal: “The fight to get the [transfer] agreement lasted a long time and was very political, but I want to make clear that we didn’t mention Mr Megrahi.

“At all times we talked about the [prisoner transfer agreement]. It was obvious we were talking about him. We all knew that was what we were talking about.

“People should not get angry because we were talking about commerce or oil. We signed an oil deal at the same time. The commerce and oil deals were all with the [prisoner transfer agreement].”

His account is confirmed by other sources. Sir Richard Dalton, a former British ambassador to Libya and a board member of the Libyan British Business Council, said: “Nobody doubted Libya wanted BP and BP was confident its commitment would go through. But the timing of the final authority to spend real money was dependent on politics.”

Bob Monetti of New Jersey, whose son Rick was among the victims of the 1988 bombing, said: “It’s always been about business.”

BP denied that political factors were involved in the deal’s ratification or that it had stalled during negotiations over the prisoner transfer talks.

A Ministry of Justice spokesman denied there had been a U-turn, but said trade considerations had been a factor in negotiating the prisoner exchange deal. He said Straw had unsuccessfully tried to accommodate the wish of the Scottish government to exclude Megrahi from agreement.

The spokesman claimed the deal was ultimately “academic” because Megrahi had been released on compassionate grounds: “The negotiations on the [transfer agreement] were part of wider negotiations aimed at the normalisation of relations with Libya, which included a range of areas, including trade.

“The exclusion or inclusion of Megrahi would not serve any practical purpose because the Scottish executive always had a veto on whether to transfer him.”

A spokesman for Lord Mandelson said he had not changed his position that the release of Megrahi was not linked to trade deals.

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