When Britain and the US charged two Libyans with carrying out the Lockerbie bombing in 1991, Douglas Hurd, the Foreign Secretary, and the then US President, George Bush, dismissed allegations that Iran was involved as unfounded.
The leaked document will revive long-held suspicions that Libya was not directly involved and, instead, Iran paid Palestinian terrorists to carry out the attack which killed 270 people.
News of the leaked document emerged as Lockerbie relatives were celebrating a US Supreme Court ruling which clears the way for damages awards totalling £500m against Pan Am. America's most senior judges yesterday upheld the finding of the US Court of Appeal that the airline was guilty of "wilful misconduct" in failing to detect the bomb.
In a written judgment, the judges refused to consider Pan Am's appeal against a ruling that its security arrangements at Frankfurt and Heathrow airports were flawed. They upheld arguments by lawyers for the bereaved families that the airline had knowingly breached safety regulations in allowing an unaccompanied suitcase, which contained a bomb, on board the aircraft.
The decision means relatives' claims for compensation can now be heard in the US courts. Families are seeking awards of up to £7m from the insurers who are administering Pan Am's affairs. The company went into liquidation four years ago.
Relatives of the victims yesterday welcomed the court's decision. Dr Jim Swire, spokesman for British families, said: "This at last marks the end of an agonising seven-year struggle to prove what we have known all along - that Pan Am's security was a sham. Our loved ones paid a £3 surcharge on their tickets to cover the `special security arrangements' that the airline said it had introduced to prevent terrorist attacks. We now know that they had not even complied with basic US federal aviation safety regulations."