By Lucy Adams and Chris Watt

THE man convicted of the Lockerbie bombing is expected to be released next week on compassionate grounds.

The move comes nearly eight-and-a-half years after he was jailed for life for the murders of 270 people in the atrocity over Scotland.

Abdelbaset Ali Mohmed al Megrahi, who is in the terminal stages of prostate cancer, is expected to return home to Tripoli before the start of Ramadan on August 21. His return will also coincide with the 40th anniversary of the coming to power of Libya's leader Colonel Muammar Gaddafi.

It is thought a final decision on Megrahi will be made and announced by the Justice Secretary Kenny MacAskill next week.

The Scottish Government has strongly denied allegations that the prisoner and the recent Libyan delegation were given any suggestion that he should drop his appeal in order to win the right to return home.

The decision will be based on Megrahi's deteriorating health and medical assessments.

However, he is expected to drop the appeal which began in April of this year.

Mr MacAskill, who will be responsible for making the decision, is currently working in the Orkney islands.

Originally it was thought that Megrahi would return home under a recent Prisoner Transfer Agreement signed with Libya. The Justice Secretary consulted with relatives of victims, Megrahi himself and the US State Attorney on this decision.

Prisoner transfer is thought to have been rejected as an option because it would be subject to judicial review and could lead to interminable delays.

There is concern that Megrahi, who is serving a 27-year sentence in HMP Greenock, could die before the end of such a review and before the end of the current appeal.

The move brings to an end months of speculation over the former Libyan agent's fate, and it comes after Mr MacAskill paid a controversial visit to Megrahi in prison.

Megrahi was convicted for the murder of 270 people when Pan Am flight 103 was blown up over Lockerbie in 1988, killing all of those on board the aircraft and many more when it crashed into houses in the town.

David Ben Ari, who advised some of the UK families affected by the Lockerbie tragedy, said: "The majority of UK relatives have been extremely unhappy with the whole trial and the first appeal."