Q+A: Libya thanks Britain for Lockerbie bomber release

LONDON (Reuters) - Libyan leader Muammar Gaddafi thanked Britain for helping free the man convicted of the 1988 Lockerbie bombing but Britain has denied it leaned on the Scottish administration to secure the release.

Following are some questions and answers on Libya's motivation and the fall-out the release of Abdel Basset al-Megrahi on compassionate grounds.

WHY DID GADDAFI THANK UK PRIME MINISTER GORDON BROWN?

Megrahi's release will have been well received by ordinary Libyans convinced of his innocence and Gaddafi's words of gratitude suggest that Libyan diplomatic efforts helped win Megrahi's freedom. Libyan official media dropped a black-out in reporting on Megrahi as soon as he landed back in Tripoli and said he was a political hostage.

Libya paid more than $1.5 billion in compensation for bombings for which it was blamed by the West but repeatedly denied any involvement in Lockerbie. It said the payments were necessary to have sanctions lifted.

Gaddafi's thanks to Brown and Britain's Queen Elizabeth may be simple diplomatic etiquette. Some analysts say Gaddafi is still frustrated at being blamed for Lockerbie and did not mind embarrassing the British government by suggesting it intervened to secure Megrahi's release.

Whatever Gaddafi's intentions, the decision to release Megrahi has provoked a storm of criticism of the government in London from British opposition figures and from the United States. Brown has yet to comment on the decision to free the Libyan, beyond asking Gaddafi to ensure Megrahi received a low-key welcome.

WHAT ARE RELATIONS LIKE BETWEEN LIBYA AND BRITAIN?

They started to go downhill when Libya was accused of supplying arms to the Irish Republican Army and reached a low point in 1984 when a British policewoman died after being hit by shots fired from the Libyan embassy in London during an anti-Gaddafi protest.

Ties were restored in 1999 and the UK began secret talks with Libya that led it to scrap its program of banned weapons.

With the end of sanctions, former British Prime Minister Tony Blair was among the first Western leaders to beat a path to Tripoli. UK firms BP and Shell are now heavily involved in exploring for hydrocarbons in Libya, which has Africa's biggest proven oil reserves.

WHAT WILL BE THE EFFECT OF ALL THIS ON LIBYA'S STANDING?

Little. Since the end of sanctions the ball is back in Libya's court as Western countries vie for lucrative deals there. That competition has been good for Libya and Gaddafi has been careful not to give any country favored status.

Western governments are loath to burn bridges with Africa's longest-serving leader since he scrapped a program of banned weapons and began helping them track down Islamic militants. The United States and its allies hold up Libya as an example to Iran and North Korea of the benefits of cooperating with the West.

WHY DOES BRITAIN WANT GOOD TIES WITH LIBYA?

Political patronage remains key for doing business in Libya and Britain needs good ties with Tripoli if British companies are to have a chance of still winning contracts there.

Tripoli has begun cooperating more on immigration issues. Libya is a major departure point for African migrants trying to enter the European Union illegally to escape poverty.

Libya's relations with its old foe the United States remain cordial at best. However much the UK government distances itself from the Scottish decision, it knows Megrahi's release will do its interests in Libya more good than harm.

WHY DID BRITAIN, A STRONG U.S. ALLY, DEFY WASHINGTON?

The U.S. reacted with anger to Megrahi's release and the head of the U.S. Federal Bureau of Investigation accused Scotland's justice minister of making a mockery of the rule of law. Yet some analysts say Brown would have found a way to stop Megrahi being released if the U.S. was deeply opposed. They say compassionate release for Megrahi at least rules out a second appeal. Megrahi's lawyers insist such an appeal would have vindicated him, which could have raised thorny questions over what to do with the compensation Libya paid.

(Additional reporting by Luke Baker; Editing by Giles Elgood)