US offered 'millions' to keep bomber in UK

Revealed: Britain and America's major disagreement over where Abdelbaset Ali al-Megrahi should end his days

Scottish ministers went ahead with the controversial decision to send the Lockerbie bomber back to Libya despite an American offer to bankroll his "house arrest" in the UK, it emerged yesterday.

US officials had "very reluctantly" backed a proposal to move Abdelbaset Ali al-Megrahi from Greenock Prison into some kind of high-security accommodation elsewhere in Scotland, senior government sources on both sides of the Atlantic confirmed. But the Americans had only consented to the option in a desperate attempt to deter the Scottish Executive from releasing Megrahi on compassionate grounds – due to his terminal prostate cancer – and sending him home to die.

They also made it clear that the US would be willing to contribute millions of dollars to a complicated house arrest operation that would have demanded round-the-clock security to keep the prisoner under guard and protect him from attack.

But the Scottish National Party government in Edinburgh eventually chose the option of compassionate release, claiming police chiefs had ruled that the security implications of house arrest would be "severe". However, Strathclyde Police denied last week that they had made any judgement on the proposal, and claimed they had only told the Scottish government how many officers would be needed.

"Our position has consistently been that we wanted to see Megrahi serve out his sentence in Scotland," an official within the US administration said yesterday. "It got to the stage [during talks over the release] where we would have agreed to anything that would have kept him under Scottish jurisdiction."

Details of the transatlantic diplomatic efforts that followed the revelation that Megrahi could be freed early came as the convicted bomber called for a public inquiry into the Lockerbie atrocity.

In an interview with The Herald, a Glasgow newspaper, he said he was determined to clear his name – and that an inquiry would help families of the victims know the truth.

"It [an inquiry] would help them to know the truth. The truth never dies. If the UK guaranteed it, I would be very supportive."

The Americans indicated their willingness to see Megrahi released into "secure custody" in Scotland during preliminary discussions of the case with politicians in Westminster and Scotland over the past two months. The remarkable concession is believed to have been referred to in letters between Washington and Kenny MacAskill, which could be published this week.

A BBC poll published on Friday suggested that releasing the prisoner into "community custody" would have been a hugely unpopular move in Scotland itself.

The survey revealed that more than half of Scots believed that Megrahi should never have been released. However, while just 29 per cent of Scots supported the decision to release Megrahi and send him home, only 15 per cent believed that he should have been moved into house arrest.

Megrahi ultimately served eight years of a minimum 27-year sentence for murdering 270 people in the bombing of Pan Am 103 over the town of Lockerbie, southern Scotland, in December 1988.

After Megrahi returned to a hero's welcome in Tripoli, President Barack Obama said he should at least be subjected to house arrest in Libya during his final days.

A Scottish Executive spokeswoman said yesterday it was up to the US to comment on their own position.

The far-reaching implications of the Megrahi affair were underlined last night, when the Sunday Times claimed letters from the Justice Secretary, Jack Straw, to Mr MacAskill prove the British Government had decided it was "in the overwhelming interests of the United Kingdom" to make the bomber eligible for return to Libya. The leaked letters reportedly revealed that Mr Straw made the decision after discussions between Libya and BP over a multi-million-pound oil exploration deal had hit difficulties. These were resolved soon afterwards.