with Colonel Gaddafi's regime after someone opened fire with an automatic weapon on Libyans demonstrating outside the Libyan embassy in London, and killed PC Yvonne Fletcher. In 1986, Libyan was blamed for a bomb that exploded in La Belle disco, Berlin, killing two of the US servicemen who regularly went there. Ronald Reagan ordered air strikes, with the intention of killing Colonel Gaddafi, which Margaret Thatcher allowed him to launch from UK territory. One bomb killed Colonel Gaddafi's daughter.
Two years later, on 21 December 1988, the explosion on Pan-Am Flight 103 over Lockerbie killed 270 people. Clothes in the case that held the bomb were traced to a shop in Malta. The shopkeeper identified Megrahi, who was head of security for Libyan Airlines, as the purchaser. In 1991, the US and Scottish authorities charged Megrahi and another man with murder.
For eight years, Libya refused to extradite them, for which the United Nations imposed trade sanctions in 1992.
In 1999, after 30 years in power, Gaddafi changed course, and set out on a 10-year campaign to win acceptability and respect from his former enemies. A combination of sanctions, falling oil prices, and poor industrial management had driven his country into prolonged recession, with unemployment at 30 per cent. However, Libya had an important new friend in Nelson Mandela, who wanted Colonel Gaddafi to be a player in the Organisation for Africa Unity.
In March, Mr Mandela visited Tripoli to make the startling announcement that he had brokered a deal, backed by the Saudi royal family, under which Colonel Gaddafi would extradite two Lockerbie suspects for trial in the Netherlands, under Scottish law, subject to a set of conditions including the lifting of UN sanctions. A month later, two Libyans, Megrahi and Al Amin Khalifa Fhimah, were handed over to the Scottish authorities in a former US airbase in the Netherlands, which had been designated as Scottish soil for the duration of the trial and any appeal.
The trial, in front of three Scottish judges sitting without a jury, began in May 2000, and dragged on until January 2001, when Fhimah was acquitted, but Megrahi was found guilty and sentenced to life imprisonment, with a recommendation that he spent a minimum of 20 years in prison.
Mr Gaddafi could however congratulate himself on the resumption of diplomatic relations with the UK, broken since 1984, on the lifting of UN sanctions, opening up the prospect of foreign investment, and on keeping the number of Libyans who had to pay the price for all those years that he had dabbled in international terrorism was down to just one.
Even so, seen from Tripoli, it was one too many. Some other major diplomatic move was needed, to start the process of getting Megrahi back.
That turning point came in the wake of the 11 September 2001 attacks. Because while the US had lost more citizens over Lockerbie than any other country, after 9/11 Gaddafi took the Americans by surprise by being one of the first Arab leaders to come out and condemn the perpetrators. He had a self-interested motive, because he was having trouble at home with religious fanatics tenuously linked with al-Qa'ida, but his reasons did not matter so much as his words. The Americans were also impressed that the Libyans were prepared to swap intelligence on Islamist terrorists. Talks with the US now opened in public.
In July 2003, two months after the invasion of Iraq, Colonel Gaddafi sprang another surprise. He announced that Libya had supplies of uranium, and was on the way to developing an atomic bomb. But his announcement included a hint that, if asked nicely, he might consider renouncing nuclear weapons.
Once again, negotiators beat a path to Tripoli. After months of talks, enlivened by a bit of drama when US and British inspectors raided a German-owned ship docked in an Italian port and seized large quantities of material bound for Libya, a deal was done, and Libya's arms factories were opened to international inspection.
This was a diplomatic tonic for the US and Britain, embarrassed by the absence of any trace of weapons of mass destruction in Iraq. Here, seemingly, was evidence that the invasion of Iraq had produced a result. The timing was so convenient that there are those who suspect that Libya only pretended to have a mass destruction weapons programme so that they could please the Americans by dismantling it. Either way, Libya was off the "Axis of Evil".
Indeed, until last week, Colonel Gaddafi had been so successful in reinventing himself in the eyes of America that he is scheduled to make his first visit to the US next month, to address the United Nations.
Not so coincidentally, each of the big initiatives in bringing Libya in from the cold has coincided with a development in Megrahi's case. After his conviction, his lawyers lodged an appeal, which took two years to come to a conclusion, so that Scottish judges were being asked to reconsider Megrahi's innocence at the very time when Gaddafi was denouncing al-Qa'ida, and terrorism in all its forms, sending Abu Nidal packing, and talking to the Americans. Unfortunately for Megrahi, it was not enough to convince the judges that they had convicted the wrong man, and Megrahi was sent back to prison.
His lawyers then prepared a case to put before the Scottish Criminal Cases Review Commission, arguing that Megrahi was the victim of a miscarriage of justice. It went in just after Gaddafi had offered to allow international inspection of Libya's weapons facilities, and in the same month that Libya accepted formal responsibility for Lockerbie and agreed to compensate the victims' families.
But the wheels of Scottish justice turn slowly, and the only development in Megrahi's life that year was that he was brought in front of a court in Glasgow to be told that his minimum sentence was not 20 years, but 27 years, meaning that he had no hope of release until his 74th birthday, in April 2026.
The next big step in Libya's rehabilitation was the highly publicised visit to the Gaddafi tent, in March 2004, by Tony Blair - the first time a British prime minister had set foot in Libya since Winston Churchill went to cheer up the front-line troops in 1943. The visit was important to the British because it opened the prospect of lucrative trade deals, and to the Libyans because Mr Blair endorsed a Prisoner Transfer Agreement that would allow Libyans sentenced by British courts to be sent back to serve their sentences in Libya, and vice versa.
This raised a new possibility, that even if they could not secure Megrahi's acquittal, or a reduction in his sentence, they could at least get him transferred to custody in Libya. "For the last seven to eight years we have been trying very hard to transfer Mr Megrahi to Libya to serve his sentence here," Saif al-Islam said in an interview in The Herald yesterday.
"We have tried many times in the past to sign the PTA without mentioning Mr Megrahi, but it was obvious we were targeting Mr Megrahi and the PTA was on the table all the time. It was part of the bargaining deal with the UK. When Tony Blair came here we signed the agreement. It is not a secret. But I want to be very clear to your readers that we didn't mention Mr Megrahi. People should not get angry because we were talking about commerce or oil. We signed an oil deal at the same time. The commerce and politics and deals were all with the PTA."
The trade deals followed fast on Mr Blair's visit, including one that brought BP back to Libya, after an absence of more than 30 years, when they signed the company's biggest ever exploration agreement, which would involve sinking 17 exploration wells. There were also ministerial visits, and informal contacts, including an encounter, a week before Megrahi's release, between Peter Mandelson and Saif Gaddafi, which took place in a property on Corfu, owned by the Rothschilds.
It began to looked as if Megrahi's future was not all black. In May 2004, only two months after Mr Blair's visit, Megrahi was given leave to appeal against his sentence. More encouraging still, from the prisoner's point of view, were the spreading doubts in Britain about the guilty verdict.
The civil rights lawyer Geoffrey Robertson QC, and almost everyone in the US who has an opinion on Lockerbie, are convinced of Megrahi's guilt, but Jim Swire, whose daughter died on Pan-Am Flight 103, and the former Labour MP Tam Dalyell are among those convinced that he is innocent. Mr Dalyell and others argue that Libya had no motive to blow up a passenger plane, whereas the Iranian government did. In July 1988, an Iranian airbus was shot down by a US warship, killing 290. At about the same time, German police cracked the Frankfurt cell of an Iranian-backed Palestinian terrorist group, and discovered bomb components similar to those used over Lockerbie. Britain's then Transport Secretary, Paul Channon, privately briefed journalists in March 1989 that the Lockerbie bombers had been traced in Germany