Moussa Koussa removed from EU sanctions list: UK

Libya's Foreign Minister Moussa Koussa holds a news conference in Tripoli March 18, 2011.

LONDON (Reuters) - Former Libyan foreign minister Moussa Koussa is no longer subject to European Union sanctions, the British government said Thursday, the latest move by the West to encourage more defections from Muammar Gaddafi's regime.

Koussa fled Libya to Britain on March 30, seeking refuge after quitting Gaddafi's government, reportedly to show his support for the Libyan rebel uprising and to protest against attacks by Gaddafi's forces on civilians.

He was questioned by Scottish police over the 1988 Lockerbie bombing, but has not been under any travel restrictions.

In a statement issued Thursday, Britain's Treasury said Koussa had been deleted from the EU financial sanctions list, removing a freeze on his assets.

"We have done that -- it sends a powerful signal to other potential defectors that, if they are currently on a list, they could be taken off that list if they do things differently," a British government source told Reuters.

The United States lifted sanctions against Koussa on April 4.

This week, the former top aide to Gaddafi left Britain to talk with Libyan opposition figures on the sidelines of an international meeting on Libya in Doha.

The decision to allow him to leave British shores was criticized by politicians and relatives of some of the 270 people killed in the Lockerbie bombing, who accused the government of hypocrisy over its handling of Koussa.

The Conservative-Liberal Democrat government has repeatedly condemned a decision in 2009 by the Scottish authorities -- at a time when the Labor party was in power in Britain -- to free the only man convicted of the bombing.

Abdel Basset al-Megrahi was allowed to return to Tripoli because he was judged to be terminally ill with cancer and to have just months to live. He is still alive.

With the outcome of the Libyan civil war still uncertain, however, Britain is keen to show any potential defectors that they have nothing to fear by deserting Gaddafi's government.

Western powers have repeatedly called for members of Gaddafi's inner circle to defect, which they hope will end a stalemate in fighting between government forces and rebels who took control of east Libya in mid-February.

"Sanctions are designed to change behavior and it is therefore right they are adjusted when new circumstances arise," a foreign ministry spokesman said.

The decision to lift sanctions was taken at the European Union foreign affairs council in Brussels Tuesday, the foreign ministry said.

(Additional reporting by Adrian Croft in Berlin; Editing by Peter Graff)