THE Prime Minister is to launch a fresh appeal to South African President Nelson Mandela to broker a deal with the Libyan government over the Lockerbie trial.

At the same time, relatives of the victims of the disaster are heading into the new year optimistic about prospects for a breakthrough in their 10-year quest for justice.

Mr Mandela voiced ''grave concerns'' about the two Libyan suspects facing a trial in either Britain or the US when he spoke at the Commonwealth heads of government conference in Edinburgh in November, 1997. Since then, they have put forward a plan under which the two men would be tried in a neutral third country, the Netherlands, under Scottish legal rules and by a panel of Scottish judges.

Mr Blair, who embarks on a four-day visit to South Africa tomorrow, said President Mandela had played a ''unique and important role'' in trying to resolve the controversy. He will be asking Mr Mandela to intervene again to get the two suspects released from Libya for trial.

He said: ''I will explain that we have now done all we reasonably can to resolve the impasse over the trial. The UK-US initiative for a trial in the Netherlands has been on the table for four months. I do not for one moment accept that the Scottish courts would not give a fair trial but was prepared to go for a third-country trial because this is what the Libyan government said it wanted.

''I will appeal to President Mandela to convince the Libyan government that a third-country trial should now proceed.''

Libya - keen to see an end to United Nations economic sanctions imposed in retaliation for the failure so far to surrender the suspects - has given the plan a qualified welcome, although the issue of where the two men would serve their sentences if convicted has proved a stumbling block.

London and Washington insist they would have to serve their sentences in Scotland, while the government in Tripoli argues that they be jailed in Libya if convicted.

Libyan leader Colonel Gaddafi put a further question mark over the prospects for rapid progress when, in an interview for Dutch television, instead of endorsing the plan as proposed by the US and UK, he declared that an international court, with judges from America, Libya, the UK and other countries, was the solution.

In the interview, screened last month on the 10th anniversary of the bombing, Gaddafi called for negotiations over the trial's format - even though Britain and the US have repeatedly said the arrangements are non-negotiable.

But Dr Jim Swire, spokesman for UK Families Flight 103, a campaign group made up of the relatives of the Britons who died aboard the jetliner, said it would be a mistake to attach too much weight to such statements.

''Both Colonel Gaddafi and Libya's People's Congress (parliament) have said they accept the idea of a trial under Scottish law in Holland,'' he pointed out.

Dr Swire noted too that there had been demonstrations in Libya against Operation Desert Fox, the British-American bombing campaign against Iraq.

But the prospect of having the UN sanctions lifted, coupled with pressure from Libya's neighbours to get the issue resolved, was a powerful incentive for Libya to hand over the suspects, he argued.

''Libya wants this issue resolved. We feel we are still on course, we feel heartened by what's going on,'' said Dr Swire, who said he still believed that the suspects would be handed over within a matter of weeks, possibly in late January.

The suspects - alleged intelligence officers Abdel Baset Ali Mohamed al-Megrahi and al-Amin Khalifa Fhimahare - are accused of blowing up the airliner on December 21, 1988, killing all 259 passengers and crew aboard and 11 people on the ground.

Relatives want to see the trial go ahead even though they are deeply suspicious of the British/US theory that the bombing was a wholly Libyan plot. They suspect the plot was devised and financed by Iran in an act of revenge for the shooting down of an Iranian airbus, carrying 290 people, by the American warship the USS Vincennes above the Gulf in July, 1988.