LIBYAN government lawyers have set conditions for compensating families of the Lockerbie bombing victims with £6.4m each - and for recovering the money if the terms are not met.
Under the demand, the final £1.3m would be paid only after the US removes Libya from its list of countries that sponsor terrorism.
The Libyan position was disclosed in a letter to the families from the New York-based law firm Kreindler & Kreindler, which represents them.
Libya is offering £1.7 bn to the families of the 270 people who died in the bombing of Pan Am 103 on December 21, 1988 - including Flora Swire, of Bromsgrove, and Helga Mosey, of Cradley, near Malvern.
A Scottish court convicted a Libyan agent of participating in the bombing.
The UN Security Council has demanded compensation for the families as a condition for lifting sanctions against Libya, which have been suspended since 1999.
A key hurdle blocking a settlement is a Security Council demand that Libya accepts responsibility for the bombing.
The US has its own set of sanctions separate from those of the UN.
The letter to the families reaffirms Libya will pay £2.5m immediately to each family once Libya has complied fully with UN requirements.
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