Libya has officially accepted responsibility for the 1988 Lockerbie bombing.

A £1.7bn (€2.4bn) deal to compensate the families of 270 victims killed in the Lockerbie bombing has been agreed by Libya, it was announced today.

Libya is willing in principle to pay compensation to relatives of those killed in the Lockerbie bombing but is still considering the amount, a minister in Colonel Gaddafi’s government said today.

A Libyan businessman who helped arrange a £1.8bn (€2.8bn) compensation deal with the families of Pan Am 103 victims said today he was acting on behalf of the Libyan business sector that wants to see UN sanctions lifted.

Negotiators are close to an agreement on the amount of compensation Libya will offer families of the 270 people killed in the Pan Am Flight 103 bombing over Lockerbie, a lawyer involved in the talks said today.