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(Updates with reaction from Lockerbie relatives, Libya,

Scotland)

By Hadeel Al Shalchi and Ali Shuaib

TRIPOLI, May 20 (Reuters) – Abdel Basset al-Megrahi, the

Libyan convicted of the 1988 bombing of a PanAm flight over

Lockerbie, died of cancer on Sunday aged 60, leaving many

questions on the attack and its aftermath unanswered.

Megrahi, who said he was not responsible for bringing the

jumbo jet down on the Scottish town and killing 270 people, was

found guilty in 2001 but was freed in 2009 and returned to Libya

because he had terminal cancer and was not expected to live

long.

Megrahi’s brother Mohammed told Reuters he had died at his

home in the Libyan capital from complications from prostate

cancer and the funeral would take place on Monday.

“He was too sick to utter anything on his deathbed,” another

brother, Abdulhakim, said. “Just because Abdul Basset is dead

doesn’t mean the past is now erased,” he said. “We will always

tell the world that my brother was innocent.”

The decision by officials in Scotland to return Megrahi to

Libya angered relatives of many victims, 189 of whom were

American, and was criticised by Washington as Megrahi returned

to a hero’s welcome from Muammar Gaddafi.

That he survived for nearly three more years, outliving

Gaddafi, who was overthrown last year, caused discomfort in

Britain. Prime Minister David Cameron, visiting the United

States on Sunday, said Megrahi should never have been freed.

Scottish leader Alex Salmond said his death confirmed his

medical condition had been serious. “Mr Megrahi’s death ends one

chapter of the Lockerbie case, but it does not close the book,”

he said, noting Scottish lawyers were seeking other suspects.

Megrahi, the only person convicted for the bombing, was

found guilty under Scots law of secretly loading a suitcase bomb

onto a plane at Malta’s Luqa Airport, where he was head of

operations for Libyan Arab Airlines in December 1988.

The suitcase was transferred at Frankfurt to another flight

and then onto New York-bound PanAm Flight 103 at London’s

Heathrow airport, concluded Scottish judges sitting at a

converted Dutch military base selected as a neutral trial venue.

All 259 people aboard the aircraft were killed when it

exploded and 11 people in the small town of Lockerbie died when

homes and vehicles were obliterated by falling debris.

Megrahi, handed over by Gaddafi under a U.N.-brokered deal,

always insisted he was merely an airline executive, not a Libyan

intelligence agent as prosecutors charged.

His trial was part of a process of rapprochement by which

Gaddafi distanced himself from association with groups regarded

as terrorists in the West and secured renewed cooperation with

Western firms keen to exploit Libya’s oil and gas reserves.

CONTROVERSIES

Reaction to Megrahi’s death reflected the controversies that

have raged for years over his role.

Many people in Britain say they believe he was a scapegoat,

while many in the United States have accused Britain of

releasing him to help secure oil deals in Gaddafi’s Libya.

Britain has denied the charge.

U.S. Senator Charles Schumer of New York, who wanted the

Libyan government that took over after Gaddafi’s ouster and

killing by rebels to take Megrahi into custody, said his return

to Libya was a major injustice.

“The whole deal smelled of a deal for oil for this man’s

freedom and that was almost blasphemy given what a horrible

person he was and the terrible destruction and tragedy that he

caused,” Schumer told CNN.

“I don’t know if we’ll ever get to the bottom of it now.”

British Prime Minister David Cameron, who was in opposition

when Megrahi was freed, said in Chicago: “I’ve always been clear

he should never have been released from prison.

“Today is a day to remember the 270 people who lost their

lives in what was an appalling terrorist act. Our thoughts

should be with them and their families for the suffering they’ve

had.”

Jim Swire, the father of one of the British Lockerbie

victims, said he was convinced Megrahi was innocent.

“I’ve been satisfied for some years that this man had

nothing to do with the murder of my daughter and I grit my teeth

every time I hear newscasters say ‘Lockerbie bomber has died'”

he told BBC News television. “This is a sad day.”

Megrahi told Reuters in October the West had exaggerated his

role and the truth about what happened would emerge soon.

Babette Solon Hollister, 79, whose 20 year old daughter died

on the PanAm flight said: “I don’t know if he was totally guilty

but we know he was involved … I doubt anything will be

resolved now.”

Libya’s National Transitional Council (NTC), which ousted

Gaddafi last year, has said it would work with the Scottish

government over the possible involvement of others in the 1988

bombing, an attack the country’s new rulers are eager to

distance themselves from.

“We would have liked to uncover more truths, but his death

will not shut the Lockerbie file,” NTC spokesman Mohamed

al-Harizy said on Sunday.

Gaddafi’s Libya emerged from isolation after it scrapped a

banned weapons programme and paid compensation for the Lockerbie

bombing.

Megrahi was handed over by Libya with fellow suspect Al-Amin

Khalifa Fahima under a U.N.-brokered deal. Fahima was acquitted

by the Scottish judges at Camp Zeist in January 2001.

Megrahi was jailed in the town of Greenock, near Glasgow.

On Sunday, his neighbours in the Libyan capital rolled out a

carpet and set up chairs in the courtyard outside his house in

preparation for condolence visits by family and friends.

“My brother was surrounded by his wife, children and his

mother as he took his last breath,” his brother Abdulhakim said.

(Additional reporting by Lin Noueihed in Tunis, Olesya

Dmitracova in London and Lily Kuo in New York, Adrian Croft in

Chicago and Bill Trott in Washington; writing by Philippa

Fletcher; editing by Alastair Macdonald)