Leading article: Lockerbie will not be laid to rest by this release

The sight of a man convicted of mass murder being greeted as a hero on his return to his home country is no a doubt a deeply shocking one. But for the Foreign Secretary, David Miliband, to suggest that Libya's response to the release of Abdelbaset Ali al-Megrahi was somehow unexpected and then to threaten the country with unspecified action if they continue the celebrations simply betrays how far he is from understanding what is going on.

The Libyan government has never accepted the guilt of their former intelligence officer, nor has their public ever believed that his trial and conviction by a Scottish court was anything other than an act of colonial bullying in an effort to find culprits for the downing of the Pan Am flight, guilty or innocent.

Which is why this tragic case remains such a profoundly unsatisfactory affair. As an act of compassion, the decision by the Scottish Justice Secretary, Kenny MacAskill, to release the Libyan was a humane one, which we have supported. But to pretend that this decision was not riddled with political interests and a degree of consultation, if not collusion, between Edinburgh and London beggars belief.

That is not to make the accusation, which so offended Mr Miliband yesterday, that it was all done to gain oil concessions for British Petroleum. But you would have to be naive not to sense the odour of backroom dealing. The fact was that al-Megrahi's release, however justified on judicial grounds, suited nearly all of the parties concerned. It seemed, when first mooted, to provide a degree of closure that brought credit to the compassion of Scotland's separate legal system, earned brownie points with Libya's government and, above all, removed the threat of an appeal which could unearth who-knows-what in the background of the trial. Nor was it deemed likely to cause too much fuss in the bereaved families, many of whom believed al-Megrahi was a fall guy – a suspicion that remains to this day.

What has taken the authorities, not least in London, by surprise is the extent of reaction from the US, where the families have expressed outrage at the sight of a mass killer walking free to shouts of acclaim in a country named as a rogue regime by previous presidents. For them, and for the government representing them, justice is about retribution not mercy. Once the White House and the Secretary of State made their objections clear, the UK government had to respond in kind.

Yet it is difficult to see what can be done to mend the damage now. There is talk of cancelling a visit by Prince Andrew this September but, considering his close relationship with the regime, this is hardly a serious gesture. The reality is that the man has been released. It was done, for whatever reason, under proper judicial process. You can hope that Gaddafi puts a damper on public displays in his country during Ramadan. But any loud complaint at this stage is mere posturing on London's part.

That is no excuse for drawing a line under the whole affair, however. Even without an appeal from al-Megrahi, the unanswered questions posed by his sole conviction should still be pursued and, one hopes, will be by Jim Swire and the other bereaved relations of the victims. At the same time the relationship between London and Edinburgh and, even more, between the UK and the regime in Libya – so carefully and so obsequiously pursued by this government – should be held up to scrutiny. We haven't heard the last of this story. Nor should we.