The death sentences for five Bulgarian nurses and a Palestinian doctor accused of infecting hundreds of Libyan children with HIV have been commuted to life in prison, Libya's foreign minister said Tuesday.

The ruling came after the families of the children each received $1 million and agreed to drop their demand for the execution of the six, who deny having infected more than 400 children and say their confessions were extracted under torture.

Libya remains under intense international pressure to free the medical workers, and Foreign Minister Abdel-Rahman Shalqam said Tripoli was willing to consider the medics' deportation to Bulgaria. He said the negotiations would take place within "the legal framework and political context" between the two countries.

"In return (for a transfer), improving the conditions of the infected children and their families should be taken into account," he told The Associated Press.

Bulgaria's chief prosecutor, Kamen Mihov, said requests would be made Wednesday to have the medics leave Libya shortly. They have been jailed since 1999.

But the medics' main Libyan defense lawyer, Osman al-Bizant, told the Al-Jazeera television network that their deportation would depend on "whether there is the possibility of carrying out the punishment there (in Bulgaria)."

Bulgarian Foreign Minister Ivailo Kalfin called the Supreme Judiciary Council's ruling "a huge step in the right direction." Asked whether it was possible the medics would be pardoned after returning home, Kalfin said: "All judicial options are real."

Libya's Supreme Court upheld the six medics' death sentences last week, but Foreign Minister Abdel-Rahman Shalqam said the country's Supreme Judiciary Council decided Tuesday to commute the sentences to life in prison. The council is a government body that can overrule the court.

"Issuing this decision automatically closes the legal case against them," Shalqam told the AP.

Speaking to journalists after the ruling, Kalfin said the case would only be closed for Bulgaria when "our citizens return to their homeland."

Experts and outside scientific reports have said the children were contaminated as a result of unhygienic conditions at a hospital in the northeastern coastal city of Benghazi. Fifty of the infected children died.

The United States and European Union welcomed the move by the Libyan judicial council, which could remove an obstacle toward rebuilding ties with Moammar Gadhafi's regime.

State Department spokesman Sean McCormack said the U.S. was "encouraged" by the decision. "We urge the Libyan government to now find a way to allow the medics to return home," he added.

"The fact that (Libya's) High Judicial Council did not uphold the death sentence is a first relief," said a joint statement by European Commission President Jose Manuel Barroso and EU External Relations Commissioner Benita Ferrero-Waldner.

"However, our objective is a solution which allows for the departure of the Bulgarian and Palestinian medical personnel from Libya and their transfer to the EU as soon as possible."

The husband of jailed nurse Kristiana Valcheva said he was relieved by the council's ruling.

"Thank God the death sentences were dropped," Zdravko Georgiev said in a radio interview from Tripoli. "But I cannot make any forecast how long the upcoming procedures will last."

Idriss Lagha, head of the Libyan-based Association for the Families of HIV-Infected Children, said the families had dropped their demand for the medics to be executed after each received the compensation money they were due under a settlement reached last week.

"All the families have received their cash transfer, $1 million for each infection," Lagha told AP late Tuesday.

Officials here have said the families' acceptance of a compensation settlement was key to resolving the deadlock and would allow the death sentences to be withdrawn. Gadhafi's son, Seif al Islam, had told a French newspaper that $400 million in compensation would be paid to the families and would be financed in the form of debt remission.

The younger Gadhafi, who heads the group working to resolve the standoff, told Le Figaro newspaper that the countries involved were Bulgaria, Slovakia, Croatia and the Czech Republic.

But government officials from Bulgaria and other nations reportedly involved in the deal have all denied they were sending cash to the families.

Bulgaria has said it would not pay compensation because it would imply the medics were guilty, but the country's foreign minister acknowledged Tuesday his country was considering participating in an international fund for humanitarian aid to Libya.

"Since other European countries are involved in the international fund for humanitarian aid, it would be strange if Bulgaria was not interested," Ivailo Kalfin told Bulgarian National radio. "We will consider some form of participation."