€2.4bn for Lockerbie victims

LIBYA has agreed to set up a €2.4 billion fund for families of 270 people killed in the 1988 Pan Am bombing, the families' lawyers said, a move that could end UN sanctions and resolve an issue that has made the country an international pariah.

The agreement, which was reached on Wednesday, was due to be followed by a letter to the United Nations admitting responsibility for the attack, said the e-mail signed by attorneys James P Kreindler and Steven R Pounian.

The attorneys appeared confident that sanctions would be lifted quickly, but US and UN diplomats were sceptical.