Prime Minister Gordon Brown last night promised he would back the battle for compensation from Libya for the relatives of IRA bomb victims, after leaked letters showed he had initially refused to take up the issue because of fears it might harm relations.
Dogged by the continuing fallout from the release of the Lockerbie bomber, Mr Brown hurriedly moved to limit damage from suggestions that he was being hard-hearted towards the families of those killed by Semtex explosive supplied to the IRA by Libya.
The papers disclosed that he had told campaigners seeking a cash payout from the Gaddafi government that it was not "appropriate" for British ministers to pursue the case. He explained that increasing Libyan co-operation on tackling terrorism could be threatened if the issue was taken up at official level.
Campaigners are preparing to travel to the Libyan capital, Tripoli, this month to press their case for compensation. The Independent disclosed last week that a senior Libyan official hinted for the first time that Tripoli was considering some form of settlement with British victims of IRA attacks.
Mohammed Siala, the secretary for international cooperation, a rank which is equivalent to minister, said the issue had not "matured" but that there was a "special understanding" between the governments.
Last night the Prime Minister announced that the families would be given help and practical advice from the Government and would be accompanied to meetings with Libyan officials.
He said: "We will appoint dedicated officers in the Foreign Office and our embassy in Tripoli who will accompany the campaign group to meetings with the Libyan government to negotiate compensation."
The first such meetings would take place "in the next few weeks," he said.
Speaking in Germany after talks with the German Chancellor, Angela Merkel, Mr Brown said: "I care enormously about the impact of all IRA atrocities on the victims, their families and friends.
"When I met with the families and their supporters and lawyers I assured them of my support for and sympathy with their cause," he said.
Last night, the victims' lawyer, Jason McCue, told The Independent: "He has listened to ordinary folk rather than bureaucrats.
"When we met the PM in December 2008 we knew we had his sympathy; he said he would consider this matter and today he has taken the side of ordinary folk and justice. It is a great day for victims.
He added: "I am confident that his moral and logistical backing for the British victims of Libyan Semtex will ensure that they now receive justice and compensation, as did the US victims when they received the support of their President."
In a letter last October to Mr McCue, which was obtained by the The Sunday Times, Mr Brown wrote: "The UK government does not consider it appropriate to enter into a bilateral discussion with Libya on this matter."
He also insisted in the letter that trade with Libya was not the "core reason" for his decision not to lobby Col Gaddafi on the issue. His stance at the time was at odds with that of the White House, which successfully lobbied the Libyan government for financial compensation for Americans who died in IRA bomb blasts.
Last night Liam Fox, the shadow Defence Secretary, said a Tory government would reopen negotiations with Libya on compensating IRA victims, if the party won the next election.
Libya: Who said what, and when?
*16 Dec 2003 British, US and Libyan intelligence officers meet at a club in Pall Mall, London.
On the agenda Preparing the ground for Libya's announcement two days later that it was giving up its WMDs. Megrahi release understood to have been alluded to.
*25 March 2004 Tony Blair meets Colonel Gaddafi for talks in a desert tent outside Tripoli.
On the agenda Cooperation on fight against terrorism, boosting trade, notably investment by British oil companies.
*2 May 2007 Libyan Justice minister Mustafa Abduljalil, right, visits London for talks with British ministers.
On the agenda Preparing ground for "memorandum of understanding" four weeks later. Not known if Megrahi was discussed.
*29 May 2007 Mr Blair visits Libya and signs "memorandum of understanding" between the two countries.
On the agenda Judicial cooperation, including a prisoner transfer agreement (PTA). Downing St denies Megrahi's future was debated.
*26 July 2007 Jack Straw, the Justice Secretary, writes to Kenny MacAskill, the Scottish Justice Secretary.
What he says Sets out ways that the PTA could exclude Megrahi.
*4 November 2007 The Duke of York makes first of two trips to Tripoli as Special Representative for International Trade and Investment. It is understood he made two private visits, including one when he met Col Gaddafi.
On the agenda Boosting business links. Libyan officials claim Megrahi was discussed in meeting with Gaddafi's son. Strongly denied by Buckingham Palace.
*19 December 2007 Jack Straw writes to Kenny MacAskill again.
What he says He has been unable exclude Megrahi from the PTA "in view of the overwhelming interests for the United Kingdom".
*26 February 2009 Foreign Office minister Bill Rammell, right, meets Libya's minister for Europe, Abdulati Alobidi, in Tripoli.
On the agenda Africa and trade. Rammell says Megrahi's fate will be decided in Edinburgh but stresses PM does not want him to die in the UK.
*12 MARCH 2009 Scottish and Libyan officials meet in Glasgow.
On the agenda Discuss the delays in ratifying a PTA . Libyans warn it would be "catastrophic" for relations if Megrahi dies on UK soil.
*10 JULY 2009 Gordon Brown meets Col Gaddafi, as head of the African Union, at G8 summit in Italy.
On the agenda Africa, security and oil prices. Gaddafi raises Megrahi's case; Brown says it is a matter for Scottish executive.
*3 AUG 2009 Lord Mandelson meets Col Gaddafi's son – one week before it emerges Megrahi is about to be released.
On the agenda Brief – and "entirely coincidental" – meeting at the Rothschilds' villa. A "fleeting conversation" about Megrahi but Lord Mandelson was "completely unsighted" on the subject.