Whitehall to publish 'all relevant' correspondence in Megrahi case

Downing Street confirmed exchanges between ministers and their counterparts north of the Border would be made public today.

The announcement comes amid growing tension between the two administrations over the handling of Abdelbaset Ali Mohmed Al Megrahi's case.

Scottish justice secretary Kenny MacAskill yesterday hit out at critics of the medical advice on which he based his decision to release Megrahi.

Weekend television footage showed Megrahi looking very ill in Libya.

More background papers are due to be published today by the Scottish Government, before a Holyrood debate on the issue tomorrow.

Earlier, First Minister Alex Salmond promised to co-operate with an inquiry by the Commons foreign affairs select committee, over meetings between UK ministers and Libyan officials, and whether the release was connected.

"Whatever the truth, it was always going to be seen by some people to have involved negotiations on oil or trade," he said.

Mr MacAskill allowed the only man convicted of the murder of 270 people blown up on Pan Am Flight 103 to return home because he purportedly had only three months to live.

However, the advice from Dr Andrew Fraser, the director of health and social care from the Scottish Prison Service (SPS), on which Mr MacAskill based his decision has come under heavy scrutiny over the last few days.

Dr Fraser's summary noted the lack of symptoms displayed by Megrahi and said that no specialist was willing to say whether he had less than three months to live – the SPS guideline period for compassionate release. This prognosis was apparently only given by the prison doctor at Greenock.

But yesterday in Falkirk, on his first official engagement since his announcement, Mr MacAskill defended the advice he was given and said it was "a matter for regret that some opposition parties seem to be seeking to undermine (the director of health and social care at the SPS]".

Speaking at the Edinburgh International Book Festival, yesterday controversial QC Michael Mansfield called for a public judicial inquiry into the Lockerbie case and the release of Megrahi.

It was confirmed last night that a Westminster inquiry into UK-US relations will examine the impact of the Scottish Government's decision to release Megrahi.

Last night, the Libyan government repeated denials the release was linked to oil deals.

Libya talking over compensation for IRA victims

LIBYA is in talks with the UK government about a potential compensation deal for victims of Tripoli-backed IRA terrorism, a senior official in Colonel Muammar al-Gaddafi's government has revealed.

Hundreds of relatives are involved in a multi-million damages claim against the Libyan leader for his country's role in providing arms and explosives to Irish republican paramilitaries during the Troubles.

Their calls for justice intensified after the release of Lockerbie bomber Abdelbaset Ali Mohmed al-Megrahi from a Scottish jail on compassionate grounds.

Now for the first time the authorities in Tripoli have hinted they may be willing to consider a pay-out.

Libyan secretary for international co-operation Mohammed Siala said the issue of compensation had been discussed with London.

When asked about the Libyan position, he said: "It is a special case. We have a good understanding with the UK."

However, Mr Siala said no firm agreement had been reached. "Things have not matured yet."

After Megrahi was released following his terminal cancer diagnosis, families of IRA victims called on Col Gaddafi to show the same compassion and settle their claim.

Meanwhile, it has also emerged that Libya is demanding Britain provide details of its alleged involvement in a plot to kill Col Gaddafi in return for co-operation over the murder of PC Yvonne Fletcher.

Britain has always denied involvement in a 1996 attempt against Col Gaddafi which led to the deaths of six bystanders.

Mr Siala said: "There is an ongoing process vis-a-vis both cases. We are giving access to information and they are going in parallel so we are waiting for some information from the UK concerning the other case."

PC Fletcher was shot dead in 1984 while on duty outside the Libyan embassy in London.