EDINBURGH, Scotland (AP) – A decision has been reached in the case of Lockerbie bomber Abdel Baset al-Megrahi and will be announced Thursday, the Scottish government said. British news networks reported that he would be released on compassionate grounds.

Scottish Justice Minister Kenny MacAskill said he had informed the families of the victims that he had come to a decision about what to do with the terminally ill al-Megrahi and would make a formal announcement Thursday afternoon in Edinburgh, the Scottish capital.

Sky News television reported Wednesday that al-Megrahi will be released from prison on compassionate grounds. The BBC has also previously reported that al-Megrahi would be set free on compassionate grounds, adding that his release had been expected before the end of the week. Neither network cited the source of its information.

In Washington, Obama administration officials said Scottish authorities had not formally notified them that al-Megrahi would be released. But they said the administration was working on the assumption that he would be freed. The officials spoke on condition of anonymity because of the delicate diplomacy involved and the sensitive nature of the case.

Al-Megrahi was convicted in 2001 of taking part in the bombing of Pan Am Flight 103 on Dec. 21, 1988. The airliner – which was carrying mostly American passengers to New York – blew up as it flew over Scotland. All 259 people aboard and 11 on the ground died when the aircraft crashed into the town of Lockerbie.

The former Libyan intelligence officer was sentenced to serve a minimum of 27 years in a Scottish prison for the crime, but a 2007 review of his case raised the prospect that al-Megrahi had been the victim of a miscarriage of justice, and many in Britain believe he is innocent.

Meanwhile, relations between Libya and the West have improved dramatically. Western energy companies – including Britain’s BP PLC – have moved into Libya in an effort to tap the country’s vast oil and gas wealth.

Libyan leader Moammar Gadhafi has lobbied for the return of al-Megrahi, an issue which took on an added sense of urgency when he was diagnosed with cancer last year. His lawyers say his condition is deteriorating.

The question of whether to release the 57-year-old al-Megrahi has divided Lockerbie families, with many in Britain in favor of setting him free, and many in the U.S. adamantly opposed.

British Rev. John Mosey, whose daughter Helga, 19, died in the attack, said Wednesday he would be glad to see al-Megrahi return home.

“It is right he should go home to die in dignity with his family. I believe it is our Christian duty to show mercy,” he said.

But American families have largely been hostile to the idea. So too has the U.S. government. Seven U.S. senators and Secretary of State Hillary Clinton have urged MacAskill not to release al-Megrahi.

“I’m totally against it. He murdered 270 people,” said Paul Halsch of Perinton, New York, who lost his 31-year-old wife in the attack. “This might sound crude or blunt, but I want him returned … the same way my wife Lorraine was … and that would be in a box.”

Peter Sullivan of Akron, Ohio, whose friend and college roommate Mike Doyle died at Lockerbie, said he believed Britain was putting commercial interests before the interests of the victims’ relatives.

“The interest of big oil should not be the basis of a miscarriage of justice to let a murderer of 270 people be released,” Sullivan said. “If he’s released on compassionate grounds, who would provide comfort and compassion to the family members?”

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