Trade and oil played a part in the decision to include the Lockerbie bomber in a prisoner transfer deal, Jack Straw has admitted.

Speaking to the Daily Telegraph, the UK justice secretary said trade was "a very big part" of the 2007 talks that led to the prisoner deal with Libya.

However, Mr Straw's spokesman accused the press of "outrageous" innuendo.

Scotland's Justice Secretary granted Abdelbaset Ali al-Megrahi compassionate release because he was terminally ill.

The 57-year-old was serving life in Greenock prison for the 1988 bombing of PanAm flight 103 over Lockerbie, which killed 270 people.

On Wednesday, Prime Minister Gordon Brown insisted there was "no conspiracy, no cover-up, no double dealing, no deal on oil" over his release.

But officials admit the prisoner transfer agreement (PTA) was part of a wider set of negotiations aimed at bringing Libya in from the international cold, and improving British trade prospects with the country.

"Libya was a rogue state," Mr Straw told the paper.

"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."

Mr Straw said Mr Brown was not involved in the decision to press ahead with the PTA, saying: "I certainly didn't talk to the PM. There is no paper trail to suggest he was involved at all."

Documents released by the UK Government show Mr Straw had originally tried to ensure that Megrahi was exempted from any prisoner deal with Libya, but in December 2007 he changed his mind.

In January 2008, just weeks after the PTA was sealed, Libya ratified a £550m oil deal with BP.

A spokesman for Mr Straw said the minister had always made clear that wider considerations such as trade played a part in the negotiation of the PTA.

He added: "Jack's position has been on the record for some days.

"He has never denied that seeking an agreement with Libya over a Prisoner Transfer Agreement was connected to a wider process of normalising relations with Libya, including on trade, which is in the interests of us all.

"The level of innuendo over this issue in the newspapers is absurd and offensive. It's outrageous and far from the truth."

Deputy First Minister of Scotland Nicola Sturgeon said: "All this discussion about the prisoner transfer agreement is academic because al-Megrahi wasn't released under the prisoner transfer agreement.

"Having said that, Jack Straw's comments do tend to support the view that the Scottish Government always took which was that the prisoner transfer agreement was tainted and compromised by trade discussions."

The Scottish National Party MSP added: "That's why I think we were right to both oppose that agreement, but also to reject the application of the Libyan Government to have al-Megrahi released under it."

Conservative foreign affairs spokesman David Lidington said: "It's very hard to square what Jack Straw says today with Gordon Brown's repeated denials of any kind of deal.

"That's why we need an independent inquiry to get to the truth."

Gwar! wrote:The funny thing is that if they had just admitted it and went "Yup, what did you expect?" people would not be as pissed off.