Gordon Brown was dragged into the centre of the row over the early release of the Lockerbie bomber last night 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 Jack Straw told The Times 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. Jack did not act unilaterally.”

The row over the early release of the Lockerbie bomber ten days ago shows no sign of abating after the Ministry of Justice indicated yesterday 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.