A Bush administration plan to let Americans travel to Libya was thrown off track Tuesday when Muammar al-Qaddafi's prime minister said his government had not accepted responsibility for blowing up Pan Am Flight 103 (search).

State Department spokesman Richard Boucher said the United States had demanded retraction of the minister's remarks, carried in a British Broadcasting Co. radio interview.

Libya last August acknowledged in a letter to the U.N. Security Council its responsibility for the 1988 bombing of the jetliner over Lockerbie (search), Scotland, that killed 270 people, including 181 Americans.

Prime Minister Shokri Ghanem (search) told the BBC that Libya's government agreed in December to pay $2.7 billion in compensation to the victims' families to improve relations with the West and to secure the lifting of U.N. sanctions against Libya.

Asked in the interview if the payment did not mean Libya had accepted guilt for the bombing, Ghanem replied: "I agree with that, and this is why I say we bought peace."

"After the sanctions and after the problems we have [been] facing because of the sanctions, the loss of money, we thought that it was easier for us to buy peace and this is why we agreed to compensation," the prime minister said in the interview, which was recorded in Libya.

The White House was expected to remove on Tuesday a 23-year-old ban on the use of U.S. passports for travel to Libya in response to Libyan leader al-Qaddafi's promise to end his country's nuclear weapons program. U.S. officials said the administration also had planned to expand diplomatic contacts with Libya -- but not to remove U.S. economic sanctions.

Presidential spokesman Scott McClellan said: "Libya made it very clear in their letter to the U.N. that it `accepts responsibility for the actions of its officials on that very matter. ... We would expect Libya to make clear that that remains their position."

At the same time, McClellan said Libya "is making important progress in their efforts to dismantle their WMD [weapons of mass destruction] programs. We have said that their good faith will be returned with the good faith of the United States."

The Rev. Jesse Jackson announced Tuesday that he will lead a delegation of U.S. religious leaders to Libya this week to meet with al-Qaddafi and other African presidents at an African Union summit in Tripoli. Jackson said the flap over Ghanem's remarks would not affect his travel plans, noting that the assessment did not come from al-Qaddafi himself or the official Libyan news agency.

Susan Cohen, of Cape May, N.J., whose daughter, Thea, 20, was killed in the bombing, said "The Libyan prime minister's statement is humiliating to the families because what he says is [that] this money is just a disgusting payoff and that they did not do it."

"This is an example for the Bush administration of what they are going to have if the administration continues the rapprochement with Libya. This is the same regime that blew up Pan Am 103, and they are totally untrustworthy," she said by telephone.

The ban on the use of U.S. passports for travel to Libya was extended for three months last November. Secretary of State Colin Powell said it would be reviewed at 90-day intervals rather than yearly as before. The ban originated in 1981 when the United States cut diplomatic relations with Libya.

Reviving U.S. travel to Libya would help al-Qaddafi emerge from semi-isolation and give American corporations an opportunity to do lucrative business legally in Libya's rich oil fields.

The Bush administration already has posted four U.S. diplomats to Tripoli, Libya's capital, after a quarter-century of icy distance. Tuesday's canceled announcement would have promised the addition of others, said a senior U.S. official on condition of anonymity.

The Americans, working out of a so-called interest section in the Belgian Embassy in Tripoli, would explore renewing formal ties with Libya as well as help U.S. travelers.

Ten to 15 U.S. and British experts now are in Libya overseeing the dismantling of al-Qaddafi's nuclear weapons program.

U.S. and British officials have devised a schedule to make further concessions to Libya as weapons programs are ended, said a second senior U.S. official, also on condition of anonymity.

The U.S. effort to ease some sanctions with Libya is meant partly to reward al-Qaddafi. It also is aimed at encouraging other countries with serious weapons programs to give them up and reap the benefits of trade with the United States.