HILLARY CLINTON has called for the man convicted of the Lockerbie bombing to be put back in a Scottish jail in the wake of Muammar Gaddafi's death.

The US Secretary of State also said that America raised the issue of Abdelbaset Ali Mohmed al Megrahi “in every meeting” with Libya’s new leadership.

Her comments came as tens of thousands of ordinary Libyans took to the streets yesterday as the country celebrated an official day of liberation from four decades of Gaddafi’s rule.

Mrs Clinton also reiterated her condemnation of the Scottish Government’s decision to free Megrahi on compassionate grounds in 2009.

Controversially, she raised the prospect of his imprisonment in another country, despite technically still being a Scottish prisoner out on licence.

She said: “We want to see him returned to prison, preferably in Scotland, where he was serving the sentence, but if not, elsewhere, because we thought it was a miscarriage of justice that he was released from the sentence that had been imposed for the ghastly bombing of Pan Am 103.”

A Scottish court sitting in The Hague found Megrahi was guilty of the bombing of Pan Am Flight 103 in December 1988.

A total of 270 people died in the worst terrorist attack over UK soil.

But Megrahi was released by Scottish ministers who said that medical advice suggested his terminal prostate cancer meant he had just three months to live.

The decision divided opinion among the relatives of those who died in the bombing, with some condemning the Scottish Government’s decision.

The United States also criticised his release.

A spokesman for the Scottish Government last night rejected Mrs Clinton’s call and said that Megrahi had been released under Scots law and was abiding by the terms of his release.

The row came as jubilant Libyans celebrated their freedom from Gaddafi.

Libya’s new rulers declared that the dictator, who they dubbed the “Pharaoh of the times”, was now consigned to the history books, and that a democratic future beckoned.

A packed square in the country’s second-largest city Benghazi heard the National Transitional Council (NTC) announce that Libya had liberated itself fully.

Consultations are also underway within Libya to form an interim Government within a month.

It is thought that this grouping will rule until proper parliamentary elections can be organised in the upcoming months.

On the streets the immediate reaction to the liberation announcement was jubilation.

“We are the Libyans. We have shown you who we are Gaddafi, you Pharaoh of the times. You have fallen into the garbage bin of history,” said lawyer Abdel Rahman el-Qeesy.

“We declare to the whole world that we have liberated our beloved country, with its cities, villages, hilltops, mountains, deserts and skies,” said an official who opened the ceremony.

Last night a spokesman for Justice Secretary Kenny MacAskill said: “Megrahi is an extremely sick man, dying of terminal prostate cancer.

“He was tried and convicted under Scottish jurisdiction by international agreement, and continues to meet the terms of his release licence.

“As has always been the case, the Lockerbie atrocity remains an open investigation, given that Megrahi was convicted on the basis that he did not act alone in an act of state-sponsored terrorism.”

In neighbouring Tunisia voters also celebrated a new beginning -- flooding into polling stations for their first free election since their uprising 10 months ago.