Libya said today it was ready in principle to pay compensation for the 1988 airliner bombing over Lockerbie that killed 270 people and to address UN demands it accept responsibility for the attack.
Foreign Minister Mr Mohammed Abderrahmane Chalgam, speaking after talks between Libyan leader Mr Muammar Gaddafi and Britain's junior Foreign Office Minister, Mr Mike O'Brien, also said Libya wanted to formalise relations with the United States.
"Regarding compensation, as a principle, yes we are going to do something on that topic," Mr Chalgam said.
"Regarding responsibility, we are discussing this issue...we are ready to get rid of this obstacle," he said.
British officials said the comments represented the clearest public declaration so far that Libya was prepared to meet conditions for the lifting of sanctions imposed over its involvement in the Lockerbie bombing.
The talks launched a new era in relations with the North African state which for years London said backed terrorism.
They cap a cautious re-engagement between the former foes after years of hostility following the fatal shooting of a British policewoman outside Libya's London embassy, British-backed US raids on Libya and the Lockerbie bombing.
United Nations sanctions on Libya were suspended after the surrender of two Libyans suspected of the Lockerbie bombing and several European countries have since begun strengthening ties with Tripoli.