Scots law is now 'laughing stock of the world'

In a radio interview, the president said the US administration had been in contact with the Scottish Government to register its objection to the move, which Mr Obama called "a mistake".

His comments came as concern grows about the effect the decision to free the one man convicted of murdering 270 people on 21 December, 1988, will have on Scotland's relations with the US. CBI Scotland has raised fears about an impact on trade and tourism and US politicians have joined American relatives in condemning justice secretary Kenny MacAskill who made the decision to free Abdelbaset Ali Mohmed al-Megrahi.

Stephanie Bernstein, the widow of Michael Bernstein, a prosecutor who tracked down Nazi war criminals, said: "He is flying back to Tripoli on Gaddafi's private plane. He is going to be greeted like a hero by Gaddafi.

"MacAskill talks about showing compassion and mercy. This is weakness. This is how it will be seen by Gaddafi. This is how it will be played within Libya and this is how it will be seen by every single person that wants to do harm to people all over the world."

Susan Cohen, whose daughter Theodora was one of many students killed on the flight, said: "I think this has been despicable. He was convicted of mass murder, but you've let him out on the most sickening grounds possible. Shame on Scotland. We were told about this proud little country, but you are still in the grip of the British Empire."

She warned that the pictures of Megrahi leaving Scotland would be remembered forever.

The issue has once again highlighted the divide between the British and American relatives of those who died in the Lockerbie bombing.

British relatives, most of whom believe Megrahi is innocent, welcomed the decision to release him. Dr Jim Swire, whose daughter Flora was on Pan Am Flight 103, said: "I don't believe for a moment that this man was involved in the way that he was found to have been involved."

But Dr Swire reiterated his regret that Megrahi's appeal against his conviction had been dropped. "I feel despondent that the West and Scotland didn't have the guts to allow this man's second appeal to continue, because I am convinced had they done so, it would have overturned the verdict against him."

However, there was anger from Lockerbie over Megrahi's release. The self-styled "Baby of Lockerbie" described the decision as "quite disgusting".

Aimee Guthrie was born within an hour of the disaster to a couple who ran a hotel in the Borders town. Now approaching her 21st birthday, she said she would have preferred it if Megrahi had been left to die in jail.

There was also a fierce debate over how Mr MacAskill's decision had affected the reputation of Scotland's legal system. Despite his claims to support the original verdict on Megrahi's guilt, some claimed the justice secretary had caved in to those who said that Scottish judges, police and prosecutors had got it wrong. Leading QC Paul McBride said: "This has left the Scottish justice system a laughing stock in the world." He said it is the first time a convicted criminal had been allowed to return to his country of origin. "I have dealt with these cases for foreign nationals and they have always been sent to a home or hospice in Scotland," he said.

But Scottish Law Society president Ian Smart said the decision had upheld the reputation of the legal profession. He said the doubts were only over evidence, not process.

Retired judge Lord McCluskey said: "There is no reason for us not to show compassion – apart from revenge, which isn't the sweetest of virtues."

In Libya, Youssef Sawani, director of the Gaddafi International Charity, said: "It shows justice can be done and that the issue is not one of revenge."