The justice secretary, Jack Straw, told his Scottish counterpart two years ago that it was in the UK's "overwhelming interests" not to exclude Abdelbaset al-Megrahi from a prisoner transfer agreement with Libya, it emerged today.
Leaked letters suggest that after failing initially to secure the exclusion of the man convicted of the Lockerbie bombing, he decided it was not prudent to do so.
The letters were sent to the Scottish justice secretary, Kenny MacAskill, whose decision to release Megrahi on compassionate grounds sparked anger in the US and a political row in the UK.
Although Megrahi was freed because he is suffering from terminal prostate cancer and not under the prisoner transfer agreement (PTA), the UK government has been accused of encouraging his release in order to facilitate trade with Libya.
Ministers have denied the accusations but refused to say whether they agreed with Megrahi's release.
In one of the letters, disclosed by the Sunday Times, Straw wrote: "I had previously accepted the importance of the al-Megrahi issue to Scotland and said I would try to get an exclusion for him on the face of the agreement.
"I have not been able to secure an explicit exclusion.
"The wider negotiations are reaching a critical stage and, in view of the overwhelming interests of the United Kingdom, I have agreed that, in this instance, the [PTA] should be in the standard form and not mention any individual."
Straw's apparent change of stance came at a crucial time in negotiations about an oil exploration contract for BP in Libya, the Sunday Times said.
Less than six weeks later, the deal was ratified.
Alex Salmond, the Scottish first minister and Scottish National party leader, said it was a matter of record that his administration had opposed the prisoner transfer agreement.
"We didn't think that the Lockerbie decision should be linked to trade or oil decisions by anyone who looked at the coincidence that the prisoner transfer agreement was being negotiated at the same time as commercial contracts," he told the BBC.
The Liberal Democrat foreign affairs spokesman, Ed Davey, said the letters provided the strongest evidence yet that the government had discussed Megrahi with the Libyans with a view to safeguarding Britain's commercial interests.
"Labour ministers will not now escape the suspicion of a terrorist for trade deal unless they agree to the transparency of a full inquiry," Davey said.
Frank Duggan, the president of the Lockerbie families group Victims of Pan Am Flight 103, described today's disclosures as "shocking".
"If there was a direct connection with trade, particularly oil, then the connection is with Britain, not with Scotland, and I think the Brits will have something to answer for," Duggan told BBC Radio Five Live.
Today, the Observer revealed secret files which lend further weight to claims that commercial interests dictated Megrahi's release.
The documents show ministers and senior civil servants met Shell to discuss the company's oil interests in Libya on at least 11 occasions, and perhaps as many as 26 times, in less than four years.
In a statement today, Straw described the latest revelations as "academic" because the Scottish executive had refused Megrahi's PTA application.
"The negotiations over a prisoner transfer agreement were part of a wider agreement for the normalisation of relations with Libya as part of bringing them into the international community," the justice secretary said.
"It was always made clear to the Libyans that, as with all other such agreements, the sentencing jurisdiction – in this case, Scotland – had a right to veto any individual application, including that of any application from Mr Megrahi.
"Notwithstanding ministers' right of veto, the Scottish executive wanted a specific carve out from the PTA treaty in respect of Mr Megrahi.
"I gave instructions to British negotiators to try to secure this.
"However, such an exclusion went beyond the standard form of PTA treaties, and in the event an agreement for a PTA in the standard form – including the rights of veto of any application – was agreed."
The cabinet minister John Denham told Sky News it was "perfectly clear" there was no link between MacAskill's decision and trade.
The Scottish government has revealed that Nelson Mandela had expressed his support for Megrahi's release.
A letter from the Mandela Foundation said the former South African president "sincerely appreciates the decision".
Mandela, who visited Megrahi at the Barlinnie prison in 2002, played a central role in brokering the agreement that led to him standing trial under Scottish law in the Netherlands.
Since the August 20 release of , who was convicted of planting a bomb on , there has been growing controversy surrounding the events which led to his release. Pan Am Flight 103 exploded in-flight in 1988 as the aircraft flew over , Scotland, killing all 259 people on board and eleven more on the ground. Al Megrahi is the only person to have been convicted of the bombing.
Kenny MacAskill 
In recent years, the British government has negotiated oil development deals with Libya. As part of the negotiations, at least three UK ministers traveled to Libya in the months leading up to Al Megrahi's release.

Leaked letters from UK   to his Scottish counterpart, , stated that it was in the "overwhelming national interests" of the UK to include Al Megrahi in prisoner transfer agreements which were part of the oil trade deals. These letters have lead to widespread speculation that the British government influenced the Scottish decision to release Al Megrahi.

Al Megrahi was released on compassionate grounds as he was diagnosed with terminal cancer. However, this diagnosis was called into question as '''' revealed that the health director of the , Dr. Andrew Fraser, relied on the advice of a  instead of an , when issuing his recommendation for release. 

When Al Megrahi returned to Libyan soil, Libyan leader Muammar al-Gaddafi thanked Gordon Brown and  for his release.

, the son of Muammar al-Gaddafi, has stated that during the prisoner transfer agreement (PTA) phase the trade negotiations, the Al Megrahi case was not specifically named, yet it was implied.
Jack Straw
"The fight to get the prisoner transfer agreement lasted a long time and was very political, but I want to make clear that we didn't mention Mr Megrahi. At all times we talked about the PTA. It was obvious we were talking about him. We all knew that was what we were talking about," he said.

In Scotland, the release of Al Megrahi has caused significant debate. A poll conducted for the BBC by  found that 60% of Scots thought the  was wrong to allow the release. 68% believe the decision was made fore reasons that did not pertain to Al Megrahi's health.
Muammar al-Gaddafi 
"No one I think seriously believes we made any other decision except for the right reasons,"  Alex Salmond said on Wednesday. "I think it was the right decision. I also absolutely know it was for the right reasons."

"We didn't think that the Lockerbie decision should be linked to trade or oil decisions by anyone who looked at the coincidence that the prisoner transfer agreement was being negotiated at the same time as commercial contracts," Salmon also stated.

The  stated Monday that, "There was no deal over the release of al-Megrahi nor could there ever be, since all decisions were for the Scottish, not U.K. government."

"The central assertion in this story is completely untrue and deeply misleading,"  added.

Correspondence released on Tuesday by the UK government shows that Abdulati Alobidi, the Libyan minister to Europe warned of "catastrophic effects for the relationship between Libya and the UK," if Al Megrahi were to die in prison in Scotland.

When Salmond asked Straw what the national interests of the UK were, Jack Straw replied, "Having sponsored terrorist attacks in the past, it Libya is now an important partner in the fight against terrorism." Libya approved a large oil exploration contract to  within days of the letter.

Libyan officials have said that since al-Megrahi's return to Libya, his health has deteriorated. He was not part of the 40th anniversary celebrations for Gaddafi's coup d'état held on Tuesday.