In April negotiations brought an end to more than seven years of stalling and evasion as Tripoli handed over the two suspects for the Pan Am bombing over Lockerbie in December 1988, in which 270 people died. Now it has accepted responsibility for the shooting of the policewoman Yvonne Fletcher outside its embassy in St James' Square in April 1984. Since then, and until yesterday, diplomatic relations had been severed.
Though only the United States among major Western countries took action as drastic as Britain, as late as last spring Libya, with Iraq, Iran, and North Korea, was a prime exhibit in the international gallery of "rogue states."
Today the line-up looks rather different. Under its reform-minded President, Mohammad Khatami, Iran is mending fences with the rest of the world. Tripoli, manifestly, is doing the same. Even the US is hard pressed to demonise Cuba any longer. Of the original "Gang of Four" only Iraq and North Korea remain - now joined by the Serbia of Slobodan Milosevic.
At the height of its isolation few countries suffered more opprobrium than Libya. Colonel Muammar Gaddafi, its leader since 1969, was regarded as a wild-eyed eccentric, a revolutionary fanatic who plotted the overthrow of the West from a tent in the Sahara. Libya was accused of supporting terrorist groups throughout the Middle East and beyond, including the IRA, the Red Army Faction in Germany and the Red Brigades in Italy - and its leader seemed positively to revel in his infamy.
Admittedly he did make token efforts to improve the climate. In June 1991, for instance, the regime announced it was severing all links with the IRA. That however, drew only icy disdain in London, and five months later Britain and the US named two Libyan suspects for the Pan Am outrage. United Nations sanctions followed, notably a ban on arms and equipment for oil and gas production, Libya's prime source of foreign exchange, and the severing of air links between Tripoli and the outside world.
Libya's relations with the US followed, if anything, an even more stormy path than those with Britain. Years of trading ideological insults and charges that Libya was fomenting terrorism culminated when Washington broke relations on 7 January 1986. Two months later US and Libyan fighters clashed over the Gulf of Sirte and on 5 April 1986 a bomb in a Berlin discotheque, believed to have been planted by Libyan agents, killed one US soldier and injured scores.
On the night of 15 April President Ronald Reagan struck back by unleashing air attacks against Libyan targets including Colonel Gaddafi's palace in Tripoli. Some of the aircraft were F-111s based in Britain. A young daughter of the colonel was among the victims. His vengeance (assuming the operation was planned and carried out by Libyans) was the Lockerbie bombing.
However, despite the handover of the Lockerbie suspects, and now Libya's acceptance that it must pay compensation and help the investigation into the death of Yvonne Fletcher, Tripoli's international rehabilitation is not complete.
On 5 April the UN sanctions were suspended. But the US has yet to restore ties, and even as Robin Cook, the Foreign Secretary, was making yesterday's announcement at Westminster, Britain was backing a US effort in New York to prevent a Security Council resolution making the suspension of sanctions permanent. But after the events of the past three months, it is inconceivable they could be restored.
Indeed, Britain's key concession to secure the Lockerbie handover - its agreement late last year that the trial could be held in a third country - was spurred by knowledge that sanctions were already starting to collapse. And though the UN measures had cost the Libyan economy dear, Colonel Gaddafi was breaking free of his diplomatic quarantine.
African leaders, most notably Presidents Hosni Mubarak of Egypt and Nelson Mandela of South Africa, flouted the ban on flying to Libya, while Western companies were ever more tempted by access to a closed, but potentially lucrative market. Ultimately Mr Mandela would play a crucial part in persuading Colonel Gaddafi to accept the Lockerbie compromise
Even before full diplomatic ties were restored, British businessmen carried out a trade mission to sound out terrain where they once prospered mightily. And this notwithstanding a veto by Mr Cook on plans by Labour MPs to accompany them to Libya, on the basis that the Fletcher issue had not been resolved.Reuse content