Libya BRITAIN'S relationship with Libya has changed dramatically in the last four decades. When PanAm flight 103 exploded over Lockerbie in 1988, the Middle East nation was already regarded as a pariah state.

Colonel Gaddafi's aggressive Arab nationalism and the expulsion of American oil firms from Libya had set him on a collision course with the US, while his supply of arms to the IRA infuriated the British government. The isolation the US and the UK imposed on Libya capped a steady deterioration in relations during the 1970s. The first arms connection between Irish Republicans and Libya was discovered in 1973 when a ship laden with guns and ammunition was apprehended off the Irish coast.

Then in April 1984, WPC Yvonne Fletcher was killed and 10 people injured when shots were fired from the Libyan People's Bureau in central London.

Two years later, Ronald Reagan ordered his aircraft to bomb Tripoli, the town of Benghazi and bases used by the Libyan military in response to the bombing of a West Berlin nightclub frequented by US soldiers that killed at least 40 Americans. At least 100 people died in the US air raids, many of them civilians, including Gaddafi's adopted daughter. Following the Lockerbie bombing, it appeared that the UK and the US would never contemplate restoring relations with Libya while Gaddafi remained. However, the rapprochement finally came.

The thaw began in 1999 when Gaddafi handed over the two men accused of planting the Lockerbie bomb and accepted "general responsibility" for the murder of WPC Fletcher. In 2002, Foreign Office Minister Mike O'Brien travelled to Libya on the first visit by a British minister since Gaddafi's 1969 coup. The following year Libya accepted responsibility for Lockerbie and agreed to pay compensation. Two years later, Tony Blair met Gaddafi in Libya as it was announced that Shell had signed a deal worth up to £550m for gas exploration rights off the Libyan coast. In May 2006 Washington announced the full resumption of diplomatic ties with Libya.

Tony Blair travelled to Libya for a second time earlier this year when he signed the now infamous memorandum of understanding regarding prisoner transfers.

Despite denials from Downing Street, Libyan officials confirmed they had made it clear that moving Megrahi out of Scotland was the main reason for the discussions.