Government 'believes release of Lockerbie bomber was mistake'

Sir Nigel Sheinwald's comments came as US Secretary of State Hillary Clinton vowed to investigate claims by a group of Democrat senators that BP had lobbied for the release of the Libyan in order to help secure an oil deal.

Al-Megrahi, the only man to be convicted of involvement in the bombing of Pan Am flight 103, which killed 270 people in 1988, was freed by the Scottish Executive on compassionate grounds after being diagnosed with terminal cancer and given just three months to live.

However, there was outrage on both sides of the Atlantic when he was flown home to a hero's welcome in Tripoli, and tension has risen as the first anniversary of his release approaches without news of his death.

Sir Nigel said: "The new British Government is clear that al-Megrahi's release was a mistake.

"The British Government deeply regrets the continuing anguish that his release on compassionate grounds has caused the families of Megrahi's victims in the UK as well as in the US."

Four US Senators called for an inquiry, after reports that the cancer expert who had previously given al-Megrahi three-months to live now believed he could survive his condition for 10 to 20 years.

However, Prof Karol Sikora said his words were taken out of context, and the chances of the bomber surviving for a decade were "less than one per cent".

In his statement, Sir Nigel said that claims al-Megrahi was released because of an oil deal involving BP and that the medical evidence used by the Scottish Executive to support his release was paid for by the Libyan government, were "not true"

But the issue has placed more pressure on BP which has already faced fierce criticism in the US over its handling of the Deepwater Horizon disaster in the Gulf of Mexico.

The beleaguered oil giant has acknowledged that it pressed the UK government over the signing of a prisoner transfer agreement with the Gaddafi regime in Libya, but insisted it had made no representations about al-Megrahi before he was released by the Scottish Executive last August.

In a statement, BP said: "It is a matter of public record that in late 2007 BP told the UK Government that we were concerned about the slow progress that was being made in concluding a prisoner transfer agreement with Libya.

"We were aware that this could have a negative impact on UK commercial interests, including the ratification by the Libyan government of BP's exploration agreement."

A Scottish Government spokesman said: "We had no contact from BP in relation to Mr Al Megrahi.

"The issues being raised in the United States at present regarding BP refer to the prisoner transfer agreement negotiated by the governments of the UK and Libya, and therefore have nothing to do with the decision on compassionate release which is a totally different process, based on entirely different criteria."