UPDATE 3-Nigerian rebel leader welcomes amnesty offer

* Government says to free militant leader after deal reached

* Terms of amnesty and release still under discussion

* Main militant group still unhappy with amnesty programme

(Adds MEND comment, paragraph 9, 18)

By Randy Fabi

ABUJA, July 9 (Reuters) - Nigerian militant leader Henry Okah, who is on trial for gun-running and treason, welcomed a government amnesty offer and could soon be released, lawyers told Reuters on Thursday.

Okah is the suspected leader of the Movement for the Emancipation of the Niger Delta (MEND), the region's main militant group, whose attacks in the last six weeks have wreaked havoc on Nigeria's oil sector.

If Okah is released, it would raise hopes that other militants would lay down their weapons in the Delta, the heart of Africa's biggest oil and gas industry.

President Umaru Yar'Adua, who announced an amnesty programme for all Niger Delta gunmen last month, extended the clemency offer to Okah and promised to release him if he accepted.

"They offered it to him yesterday. Okah welcomed the amnesty," one of Okah's lawyers, Wilson Ajuwa, said by telephone. "We are in the process of finalising it. Hopefully, it will be resolved early next week."

The presidency confirmed that Okah would be released, but details of the agreement still needed to be worked out.

"The president is delighted to hear that he has accepted the amnesty offer," said spokesman Olusegun Adeniyi on the sidelines of the G8 summit in Italy. "With his acceptance, he will be released when the formalities are concluded."

A meeting between Okah's lawyers and government officials was expected on Sunday or Monday to finalise the terms of the amnesty and his release, a second Okah lawyer said.

A MEND spokesman welcomed Okah's decision to accept the deal, but again dismissed the amnesty programme in its current form.