Gordon Brown was dragged into the center of the controversy over the early release of the Lockerbie bomber on Sunday after it emerged that a key decision that could have paved the way for the terrorist to serve his sentence in Libya was approved by Downing Street.

A source close to British Justice Secretary Jack Straw told The Times of London that the move to include Abdul Baset Ali al-Megrahi in a prisoner transfer agreement in 2007 was a government decision and was not made at the sole discretion of the Justice Secretary. "It wasn't just Jack who decided this. It was a Government decision," the person said. "Jack did not act unilaterally."

The uproar over the early release of the Lockerbie bomber 10 days ago has shown no sign of abating after the Ministry of Justice indicated on Sunday that the decision to include al-Megrahi in a prisoner transfer agreement had been made with the possibility of trade deals with Libya in mind.

"The negotiations over a prisoner transfer agreement were part of a wider agreement for the normalization of relations with Libya as part of bringing them into the international community," he said.

It is understood that the "wider agreement" included assurances on trade and other issues such as nuclear non-proliferation.

Government insiders insisted that the terms of the agreement did not relate to a specific £15 billion oil and gas exploration deal in Libya for BP, the British oil group, secured that year.

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