Colonel Gaddafi is to pay $3.5 billion to victims of IRA atrocities it has been revealed.
It follows nine months of talks between British family representatives and Gaddafi officials in Tripoli.
Gaddafi allowed the importation from Libya in the 1980s of tons of semtex plastic explosives to be used in IRA attacks.
Among the attacks carried out with Libyan semtex were the Harrods Christmas bombing of 1983, which killed six and the Enniskillen atrocity of 1987 that left 11 dead during a Remembrance Day service.
And Libyan semtex was also used in the 1989 Lockerbie Pan Am 103 airline bombing that left 270 dead.
Libya has already paid £8 million to each of the families of victims aboard Pan Am Flight 103.
Around £1.2 billion of the compensation is likely to go to 147 families who have been pressing Libya to acknowledge its role in IRA arocites.
The British Foreign Office stated : 'The Government is sympathetic to the suffering of the victims and their legitimate attempts to seek redress.
'We believe success is best achieved by direct contacts, which we have helped establish, between the campaign and the Libyan authorities.'