LONDON, September 1, 2009 (AFP) - Britain did not believe it was "necessary or sensible" to risk damaging its relations with Libya by excluding the Lockerbie bomber from a prisoner transfer agreement, new documents revealed Tuesday.

British Justice Secretary Jack Straw made the conclusion in letters released by the British government in a bid to defuse an increasingly damaging row over the release last month of Abdelbaset Ali Mohmet al-Megrahi.

Straw initially believed that Megrahi -- the only person convicted of the murder of 270 people in the 1988 bombing of a Pan Am jet over the Scottish town of Lockerbie -- should not be covered by such an agreement.

But in a letter to Scottish First Minister Alex Salmond dated February 11, 2008, Straw said he had dropped plans to exclude Megrahi because it was important to smooth Libya's return to the international fold.

"Developing a strong relationship with Libya, and helping it to reintegrate into the international community, is good for the UK," Straw wrote, citing Libya as an "important partner" in fighting terrorism and illegal immigration.

But Straw made clear that Scotland -- which had been pushing to exclude Megrahi from the prisoner transfer agreement (PTA) -- would have a veto over any attempt to move him from jail in Scotland to a prison in Libya.

He wrote: "Given these safeguards I do not believe that it is necessary, or sensible, to risk damaging our wide-ranging and beneficial relationship with Libya by inserting a specific exclusion into the PTA" for Megrahi.

The Libyan was not eventually released under a prisoner transfer agreement.

He was freed on August 20 on compassionate grounds by the semi-autonomous authorities in Scotland because he has terminal prostate cancer.

The British government hopes the publication of the letters will counter accusations that Megrahi was released as part of a deal to smooth the wheels of a massive oil and gas deal with oil-rich Libya.

Straw has denied that the negotiations referred to in his letters, which were leaked to a Sunday newspaper, involved any commercial deals with Libya, or that British negotiators ever discussed releasing Megrahi.

Britain has insisted that the decision to free Megrahi -- which enraged the White House and American relatives of the Lockerbie victims -- was taken solely by Scotland.

A letter dated in November 2008 reveals that the Libyans did raise the questions of Megrahi's failing health and his possible release, but that Britain insisted it was purely a matter for Scotland.

"I would like to assure you that at both ministerial and official level we are continuing to reiterate to the Libyans that any questions of treatment, possible

compassionate release or any application to transfer under the PTA and bail are a matter exclusively for Scottish ministers and Scottish courts respectively," Straw wrote.

The Scottish government also published a number of documents on its website, including a handwritten note from Megrahi to Scottish Justice Secretary Kenny MacAskill in which he said: "I am unjustly convicted of a most heinous crime."

The letter also told of Megrahi's "sense of desolation". The Libyan, who served eight years of a life sentence, continues to protest his innocence.

Britain and the United States condemned the celebrations that greeted Megrahi when he returned to Tripoli, despite an appeal from Brown in a letter to Libyan leader Moamer Kadhafi to keep the occasion low-key.

The release of the letters come as Kadhafi marked the 40th anniversary on Tuesday of the bloodless coup that brought him to power.

London and Washington will be watching closely to see if Megrahi forms any part of the elaborate anniversary celebrations which come to a climax later Tuesday.