EDINBURGH - Scotland released on Thursday a former Libyan agent jailed for life for the 1988 Lockerbie bombing that killed 270 people, most of them Americans, because he is dying of cancer.

Abdel Basset al-Megrahi, who has less than three months to live, was being returned to Libya on compassionate grounds, a decision strongly criticized by the United States, which had campaigned to keep him in prison.

He is a dying man, he is terminally ill, Scottish justice minister Kenny MacAskill told a news conference. My decision is that he returns home to die.

A Libyan government spokesman said Megrahi was being flown home with a son of Libyan leader Muammar Gaddafi.

Television pictures showed him being driven out of the gates of Greenock Prison in western Scotland, with a small crowd of locals booing as his convoy departed for the airport.

The United States government, which opposed Megrahi's early release, said it deeply regrets the decision.

As we have expressed repeatedly to officials of the government of the United Kingdom and to Scottish authorities, we continue to believe that Megrahi should serve out his sentence in Scotland, the White House said in a statement.

Megrahi, 57, is the only person convicted for the bombing of Pan Am Flight 103 in mid-air above the Scottish town of Lockerbie.

He lost an appeal against his conviction in 2002, but a Scottish review of his case ruled in 2007 that there might have been a miscarriage of justice.

'NO HERO'S WELCOME'

Relatives of many of the 189 American victims thought Megrahi should have served his full life sentence in prison after being convicted of Britain's deadliest terrorist attack.

Frank Duggan, president of the Victims of Pan Am 103, a group that represents the families of U.S. victims, said he understood the Libyan government had promised that Megrahi would not go back to a hero's welcome.

There is going to be no dancing in the end-zone, as the expression goes, he told Reuters.

The families of many of the Britons killed in the bombing were never convinced by the strength of the evidence against him and thought he should be allowed to go home to die.

Megrahi is likely to be warmly welcomed by Gaddafi, who has moved closer to the Western mainstream since dropping his nuclear weapons program in 2003.

The Megrahi case had become a millstone for the Scottish government as it balanced a series of competing interests, among them the fact that British oil companies are trying to do more business in Libya and hope Megrahi's release may open doors.
The British oil company BP ended a 30-year absence from Libya in 2007 when it signed its biggest exploration commitment through a bilateral deal. Royal Dutch Shell also wants to tap Libya's reserves, the biggest in Africa.

London-based Algerian lawyer Saad Djebbar, who has worked with Libya on the Lockerbie case, said the release had done Britain a great favor in diplomatic and economic terms.

This will enhance relations ... Britain and Scotland will grow in the eyes of the Arab states, he told the BBC. I assure you it will help British interests.

Former British ambassador to Libya Oliver Miles played down the benefits to Britain and said the release was only one part of a long process of improving relations.

It removes an irritant, but it wasn't a great irritant, he told Reuters. I don't think it is going to give us lots of lovely new business.

(Additional reporting by Ali Shuaib in Tripoli, Matt Spetalnick in Washington and Peter Griffiths and Luke Baker in London; editing by Tim Pearce)

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