Relatives of the victims of the 1988 Lockerbie bombing have given a cautious welcome to a statement by Libya that it is ready, in principle, to pay them compensation.

We've got to be sure that Libya is going to deliver on what he is promising

Mike O'Brien UK minister

The announcement was made by Libyan Foreign Minister Abderrahmane Chalgam, after talks between his leader, Colonel Gadaffi, and visiting UK Foreign Office Minister Mike O'Brien.

Jim Swire, a spokesman for the families of the Lockerbie victims, said the Libyan announcement should be regarded as a significant step forward.

Mr O' Brien is expected to hold further talks with Libyan officials on Thursday before returning to London.

Libya has never admitted responsibility for the Lockerbie bombing of Pan Am flight 103, which killed 270 people.

Libya has never admitted responsibility

Libyan Abdelbaset al-Megrahi is serving life in a Scottish prison after being convicted in 2001 of the bombing.

"This is the first time, I think, that an important member of the Libyan regime has made a comment like this," said Mr Swire.

"But of course paying compensation is only one of the things that Libya has to do if she wants to get the UN sanctions permanently removed."

Sanctions against Libya have been suspended but Colonel Gaddafi wants them lifted permanently.

Owning up?

Mr O'Brien said Colonel Gaddafi had "said the right things" on a range of issues, including the fight against terrorism and weapons of mass destruction.

In June, Colonel Gaddafi's son, Seif al-Islam Gaddafi, said he believed the Libyan Government would pay compensation, but not say it was responsible for the bombing.

Libya wants to normalise relations with the west

On Wednesday, Foreign Minister Mohammed Abderrahmane Chalgam said that Libya was discussing the issue of responsibility, and was "ready to get rid of this obstacle".

Mr Chalgam spoke of Libya's desire to improve relations not only with the UK but with the US.

"We have to extend and expand our bilateral relations with Britain and also we are completely keen to arrive at reconciliation and normalisation with the US," he said.

The meeting between Colonel Gaddafi and Mr O'Brien was the first time since 1983 that a UK minister had met the Libyan leader.

'Inspectors welcome'

After three hour of talks at Sirte, a coastal town about 320km (200 miles) east of Tripoli, Mr O'Brien was cautiously optimistic.

A Libyan is serving a life sentence for the bombing

"But we've got to be sure that Libya is going to deliver on what he is promising," said Mr O'Brien.

The minister said Tripoli was prepared to sign up to 20 international conventions relating to weapons of mass destruction and was further considering signing others - including the chemical weapons convention.

Mr O'Brien also said Libya expressed willingness to considering inspections of suspected nuclear sites

In May, US Under Secretary of State John Bolton accused Libya of trying to re-establish its "offensive chemical weapons ability".

He also said the country "may be capable of producing small quantities of biological agent" and was still seeking nuclear weapons.