Britain's Foreign Office took the unusual step Sunday of denying a newspaper report that diplomats had reached a secret agreement with Libya that would prevent the killer of a British policewoman from being tried in Britain.

A spokesman who asked not to be identified because of departmental policy said there was no truth to The Sunday Times' claim that a secret deal reached three years ago meant the killer of policewoman Yvonne Fletcher would never face trial in Britain.

The issue is sensitive because the British government's dealings with Libya have been under intense scrutiny since the release last month of Lockerbie bomber Abdel Baset al-Megrahi, who is terminally ill with cancer.

Policewoman Fletcher was shot dead outside the Libyan embassy in London 25 years ago. The newspaper said her family had not been told of the secret agreement.

The foreign office said the letters between British and Libyan diplomats cited by the newspaper simply establish that under Libyan law there was, at the time, no provision that would allow a Libyan to be extradited to face trial in other countries. That means a trial inside Libya would be the only option, diplomats said.

The spokesman said the government still hopes the Libyans will cooperate with British police investigating the crime.

The British government has been criticized in recent for making too many concessions to Libyan leader Moammar Gaddafi because of its desire for more trade and oil-related contracts, and the Sunday Times article fueled this sentiment.

"It increasingly seems as if ministers were prepared to give Colonel Gaddafi anything he wanted in return for oil, gas and arms contracts," Liberal Democrat foreign affairs spokesman Ed Davey said.

"It's not surprising that they tried to keep this shoddy behavior secret and failed to inform Parliament, the public and even the parents of Yvonne Fletcher."