The New York-bound Pan Am Boeing 747 blew up and crashed over Lockerbie in 1988

LONDON, August 14 (IslamOnline.net & News Agencies) – In a move clearing the way for an end to long-standing sanctions and poisoned relations with the United States and Britain, Libya signed with families of the 1988 Lockerbie bombing victims an agreement to set up a 2.7 billion dollars compensation fund, family lawyers said Thursday, August 14.

"We expect the 2.7 billion will be deposited with the Bank of International Settlements (BIS) soon and that Libya will be sending its letter accepting responsibility to the U.N. Security council," lawyers James Kreindler and Steven Pounian said of the accord signed in London late Wednesday, August 13.

As the deal is envisaged, Libya would pay each of the families 10 million dollars in installments based on the lifting of U.N sanctions and the removal of Libya from the U.S. list of "state sponsors of terrorism".

Libyan admission of guilt - long demanded by the United States and Britain - and the actual payment of the compensation were expected to be followed by moves to lift U.N. sanctions against Libya, possibly as early as next week.

"When both events occur, we expect the U.N. Security Council to enter a resolution lifting the U.N. sanctions against Libya, which will trigger the payment of four million (dollars) per case to our New York trust account," the lawyers said in letter released by the media.

The lifting of the U.N. sanctions would set the stage for a dialogue between Libya and the United States about the lifting of separate U.S. sanctions.

A further four million dollars would be delivered to each family once U.S. sanctions are lifted and the final two-million-dollar payment would be made if Libya is removed the U.S. list of "state sponsors of terrorism".

Diplomatic sources quoted by Agence France-Presse (AFP) said on Tuesday, August 12, that Libya had agreed to send a letter to the U.N. Security Council, either Thursday or Friday, admitting it was behind the attack.

And U.S. Secretary of State Colin Powell said late Monday, August 11, that Libya appears ready to admit responsibility for the Lockerbie bombing and pay compensation to the victims' families.

'Assurances'

Saad Djebbar, a London-based lawyer familiar with the case, said Thursday that terms and conditions of the account have already been disclosed, and "an agreement has been reached. All that remains are the procedural matters."

"I expect that by the middle of next week U.N. sanctions will have been finally removed on Libya," he added.

The Financial Times Thursday quoted Djebbar as saying that Libya has agreed to assume responsibility for the bombing only after assurances from London and Washington that it will not lead to legal action being taken against its government.

"All sides understand this (admission) shall not be considered proof or evidence to be used against the Libyan government," the business daily quoted him as saying.

'Unforgivable'

U.S. officials said American victims are invited to the State Department Friday, August 15, for a briefing on the deal.

But some of the victims have been angered by what they see as steps to bring Colonel Muammar Gaddafi's regime closer to the West.

"The bombing of Pan Am 103 is an unforgivable act and we're on the point of forgiving him and what we're getting is a payoff," Dan Cohen of New Jersey, whose 20-year-old daughter Theodora died in the bombing, was quoted by the BBC NewsOnline as saying.

Stephanie Bernstein of Maryland, whose husband Michael died at the age of 36, said she wanted Libya to accept responsibility.

And Matt Berkley from Oxford said he was unwilling to "sign away" his right to sue those responsible for the death of his brother, Alistair Berkley.

A New York-bound Pan Am Boeing 747 blew up and crashed over Lockerbie, southwest Scotland on December 21, 1988, after taking off from London, killing all 259 people on board and another 11 on the ground.

In January 2001, a Scottish court sitting in the Netherlands convicted Abdel Basset Ali al-Megrahi, one of two Libyan agents charged with the bombing, and sentenced him to life in prison.

French Call For Equity

One sticking point could be the $33m compensation agreed by Libya when it accepted responsibility for the deaths of 170 people when a French passenger plane was bombed over Africa in 1989.

That amounted to $194,000 for each victim and France has said the families want equity with those of the Lockerbie victims.