Libya claims that there was a deal on the Lockerbie bomber being released

The Labor government in Britain must be really damaged by this. Do I believe that they would do something like this? No. But as long as Libya claims that there was a deal, it must be doing real harm to Labor. The real question is why the Obama administration couldn't convince the UK not to release this terrorist early from prison. This terrorist had served well less than half his term and there was no reason that he should have been released early.

Gaddafi met Megrahi on Friday, embracing him and getting a kiss on the hand in return. The beaming Libyan leader expressed gratitude to Brown and Queen Elizabeth.

'This step is in the interest of relations between the two countries...and of the personal friendship between me and them and will be positively reflected for sure in all areas of cooperation between the two countries,' he told Libyan TV.

His son Saif al-Islam went further, saying that whenever he had met British officials to discuss business, the issue of Megrahi's release was a condition of any deal being struck.

Mandelson said he had met Gaddafi's son twice in the past year and the issue of the Lockerbie bomber had been raised both times, but his release was not tied to business deals.

'It's not only completely wrong to make any such suggestion or insinuation, it's also quite offensive,' he told reporters. . . .

In all British interests regarding Libya, I always put you on the table,' Saif al-Islam's newspaper quoted him as telling Megrahi on his return to Libya.

'All the visits of the ex-Prime Minister Blair and the big secret and public work that all the parties entered into was carried out in order to release you. The exploitation of British-Libyan political and trade interests was always done with the aim of releasing Abdel Basset al-Megrahi.'

European governments including Britain's are lobbying hard for business in Libya as it emerges from years of sanctions. Oil companies such as BP and Shell (LSE: RDSB.L - news) are among several British firms hoping to make big profits in the desert country. . . .