THE Libyan government is set to demand more than £1.4 billion paid to the families of the Lockerbie bombing victims if the man convicted of the atrocity succeeds in his appeal.
Sources say it is "very seriously considering" seeking a refund if an appeal, expected to be announced today, quashes the 2001 conviction of Abdelbaset Ali Mohmed al-Megrahi.
A significant chunk of the bill could land at the Scottish Executive's doorstep as it is responsible for the legal system.
Such a move could cause a sudden cooling in relations between Libya and the UK and US governments, as the latter two would also be likely to face demands for the money.
The decision whether to refer the case back to the Court of Appeal will be announced today.
Libya has already paid each family $8 million (4 million) in compensation for the 1988 bombing, which killed 270 people. A final tranche, worth about $2 million (1 million) for each family, was withdrawn two years ago in protest at the US State Department's refusal to remove Libya from a list of states considered to support international terrorism.
However, if Megrahi is acquitted, demands for a reimbursement would be likely, particularly if allegations of collusion and fabrication of evidence were found to be true.
Senior Libyan government figures have discussed the issue in recent weeks, ahead of today's announcement by the Scottish Criminal Cases Review Commission (SCCRC) on whether it believes the conviction of Megrahi was a miscarriage of justice.
One source said: "They are considering very seriously claiming that money if Megrahi is freed, but they have not yet decided. The question is who they will claim it from. It will not be from the families."
Dr Jim Swire, whose daughter, Flora, was among those killed in the bombing, said Libya would appear to have a strong case for claiming the money back if the conviction was overturned.
He said: "I'm not privy to any information about Libya's intentions, but, on the face of it, they would appear to have a case, especially if it is found that the investigation involved a deliberate perversion of the course of justice.
"We don't know that yet."
He said the new Scottish Nationalist administration would have to take "very serious measures" to clear the name of Scottish justice if Megrahi was acquitted.
"I've been to a number of international legal conferences over the years and experts from all over the world ask 'how could that court reach that verdict on the evidence?'
"That, coupled with the suspicion of a deliberate perversion of the course of justice, means that Alex Salmond will very likely feel a great responsibility to clear Scotland's name."
Tam Dalyell, the former Linlithgow MP and a long-time campaigner for the verdict on Britain's worst case of mass murder to be reconsidered, this week called for an independent public inquiry, led by foreign judges, into the handling of the Lockerbie inquiry.
If the SCCRC comes out against the conviction, Mr Dalyell claimed: "It will be shattering for the whole system of Scottish justice."
Dr Swire agreed that a public inquiry should be led by a panel of international judges.
A Scottish Executive spokesman said: "We are not going to comment on speculation in advance of the commission's announcement on Thursday."