Libya has begun transferring to an escrow account in an international bank $2.7 billion in compensation for families of victims of Pan Am Flight 103 (search), the State Department said Wednesday.

Spokesman Richard Boucher said that because the amount of money is so large, the transfer may not be completed until Thursday.

Libya officially agreed to the compensation package last week in response to U.N. Security Council demands. Libya also accepted responsibility for the 1988 bombing of the Pan Am flight.

In return, the Council is due to lift sanctions against Libya that have been in place for more than a decade.

France has sought to delay Council action until it receives additional compensation for families of people killed in the bombing of a passenger jet operated by the French airline UTA over the West African country of Niger (search) in 1989.

Those families shared $33 million in compensation from Libya which, when divided by the number of victims, represented only a tiny fraction of what lawyers for the Pan Am 103 families were able to negotiate from Libyan authorities.

The Bush administration has said it opposes any action that would delay final U.N. Security Council action on the Pan Am 103 case.

Secretary of State Colin Powell has made that point in telephone conversations with French Foreign Minister Dominique Villepin (search), Boucher said.