By Jason Groves and Tim Shipman
Last updated at 1:36 AM on 05th September 2009
Jack Straw said trade played a 'very big part' in his decision to make it possible for Megrahi to be sent home
Jack Straw has admitted for the first time that trade and oil deals with Libya played 'a very big part' in the handling of the Lockerbie bomber's case.
The Justice Secretary said trade was a major influence on his decision to include Abdelbaset Al Megrahi in a prisoner transfer agreement with Libya signed two years ago, just as BP was seeking a multi-billion pound deal there.
The admission casts grave doubt on Gordon Brown's claim this week that there had been 'no conspiracy, no cover-up, no double-dealing, no deal on oil'.
Mr Straw said: 'Libya was a rogue state. We wanted to bring it back into the fold. And yes, that included trade because trade is an essential part of it.'
Mr Straw's remarks reignited the furore about Labour's handling of the affair.
The Prime Minister insisted earlier this week that the dominant factor in British policy was not oil or commercial interests but the need to bring the former pariah state on board in the fight against international terrorism and nuclear proliferation.
But Mr Straw undercut that assertion, saying that trade played 'a very big part' in his decision to make it possible for Megrahi to be sent home.
The revelation is highly damaging as it is the first time such a senior figure has confirmed that ministers were so keen to improve relations with Libya they were prepared to make concessions over the bomber.
Mr Straw had earlier confirmed that he had received two calls from Sir Mark Allen, a former MI6 officer then working for BP, about a planned prisoner transfer agreement with Libya.
In an interview with the Daily Telegraph, Mr Straw insisted that the decision to release Megrahi on compassionate grounds last month was made by the Scottish Executive and did not involve the prisoner agreement. But he said he was 'unapologetic' about paving the way for him to go free.
Documents released earlier had shown Mr Straw assuring the Scottish Government in 2007 that Megrahi would be excluded from any prisoner transfer agreement.
In December that year, however, he told Edinburgh officials he had been unable to secure an exemption for Megrahi but had decided to go ahead with the deal 'in view of the overwhelming interests of the United Kingdom'.
Asked on Friday night whether trade was a factor in his decision, Mr Straw said: 'Yes... a very big part of that. I'm unapologetic about that. Libya was a rogue state... We wanted to bring it back into the fold.
'And yes, that included trade because trade is an essential part of it and subsequently there was the BP deal.'
In January 2008, a few weeks later, Libya ratified a £550million oil deal with BP which could be worth £15billion to the company.
Mr Straw confirmed that Sir Mark called him in October and November 2007. The conversations came after the BP agreement to search for oil ran into difficulties in Tripoli.
BP, which had previously denied lobbying on the issue, confirmed that it had raised the progress of the prisoner transfer agreement with Mr Straw.
But the company added: 'In making that point to the Government, we were not talking about the Megrahi case because we were fully aware that this was solely a matter for the Scottish Executive and not the UK authorities.'
Megrahi was serving a life sentence in a Scottish jail after being convicted of planting the bomb on Pan Am Flight 103 that killed 270 people in 1988.
A spokesman for Mr Straw said his conversations with Sir Mark 'did not tell him anything of which he was not already aware'.
Mr Straw insisted that Mr Brown had not been involved in the decision to press ahead with the prisoner transfer deal, saying: 'I certainly didn't talk to the PM. There is no paper trail to suggest he was involved at all.'
But his admission will raise new questions about the Prime Minister's handling of the affair, which has been widely criticised.
Different story: Gordon Brown's claim there was 'no deal on oil' is undermined by Mr Straw's comments
Critics and allies alike have expressed frustration with Mr Brown's reluctance to reveal the full extent of contacts and discussions between British ministers and Colonel Gaddafi's men.
There was fury in the U.S., home of most of the Lockerbie victims, when it emerged that a minister had told the Libyan regime privately that neither Mr Brown nor Foreign Secretary David Miliband wanted Megrahi to die in jail.
Mr Straw's candid response will also strengthen calls for an independent inquiry into Labour's relations with the Libyan dictator.
Shadow Foreign Minister David Lidington, repeating David Cameron's call for a probe, said: 'Jack Straw should explain why he rushed this agreement through without giving Parliament time to examine it fully. This revelation further strengthens the case for a full independent inquiry.'
Liberal Democrat spokesman Ed Davey said ministers' honesty as well as their judgment was now in question.