France hinders British moves to lift sanctions on Libya

Britain sought to draw a line under the Lockerbie affair when it tabled a resolution at the UN yesterday calling for the formal lifting of sanctions against Libya. But France threatened to block the deal unless Libya paid millions of dollars of additional compensation for a separate terror attack.

Emyr Jones Parry, Britain's ambassador to the UN, circulated the draft resolution at an afternoon meeting of the Security Council in New York, calling for an immediate lifting of the sanctions. A vote is not expected until later this week, in effect giving France more time for behind-the-scenes negotiations with Libya.

The resolution follows an exchange of letters last week in which Libya finally accepted "civil responsibility" for the 1988 bombing of Pan Am flight 103, in which 270 people were killed. It has agreed to pay up to $10m (about £6.3m) in compensation to the families of each of the victims.

One UN diplomat said yesterday: "Normally a resolution concludes with the words 'We remain seized of the matter', which means they might want to come back to the issue. This is the first time I have seen one without those words."

But while the governments of Britain, Libya and - to a lesser degree - the US might be trying to draw a line under the issue, France has threatened to delay the deal, possibly by using its veto.

The French authorities are under intense domestic pressure to get additional compensation from Libya for the 1989 bombing of a French UTA aircraft over Niger, which killed 170 people, including 65 French citizens. Ten years later, Libya provided just $36m - about $33,800 per victim - in compensation. In the original UN resolution that imposed sanctions in 1992, the UTA bombing was linked to Lockerbie.

"Important progress has been made in these negotiations, which we would like to lead as rapidly as possible to an agreement on fair damages in relation to those that will go to the families of the victims of the Lockerbie attack," the French Foreign Ministry said.

France has officially refused to say whether it would use its veto, though in private diplomats have raised the threat. "The French are talking as tough as they possibly can. But that may be a bluff to get something out of the Libyans," one council diplomat said.

Over the weekend, Mohammed Abderrahmane Chalgam, Libya's Foreign Minister, ruled out paying additional compensation to France.

Libya has yet to deposit the $2.7bn it has agreed into an international escrow account. This should happen either today or tomorrow, which will pave the way for a vote by the Security Council to lift formally the sanctions that were suspended in 1999. The US - which has its own, separate sanctions against Libya, is likely to abstain.

Libya has been making efforts to return to the international fold and develop closer trade links with the West since 1999, when it handed over two Libyan suspects to stand trial under Scottish law at a purpose-built court in the Netherlands. In January 2001, one of those suspects, Abdel Basset al-Megrahi, was convicted. His co-accused was cleared.

The issue of compensation has divided the families of those who died in the Lockerbie bombing. Many of the families still wish to see a full, open inquiry into the bombing to answer many of the questions surrounding the bombing and its subsequent investigation.

Jim Swire, 67, whose daughter, Flora, was killed on the aircraft just before her 24th birthday, said: "Compensation is one part of a complicated process. It doesn't bring us any closer to the truth we have been fighting for for 15 years."

Lifting the UN sanctions will not affect separate American sanctions, including a ban on Libyan oil sales to the United States, which Washington has vowed to keep in force.