The Libyan government has accepted responsibility for the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, potentially clearing a major obstacle to eliminating U.S. and U.N. economic sanctions on the country, Libyan Foreign Minister Abdel-Rahman Shalqam said today.

His statement represents the latest concession by Libya, which previously agreed to establish a fund to compensate families of the explosion's 270 victims. During discussions with lawyers representing the families, Libyan officials said they would pay up to $10 million for each victim in three installments as sanctions are lifted, according to U.S. sources familiar with the negotiations.

While Libya's willingness to set up a $2.7 billion fund represented an implicit acceptance of responsibility, U.S. and British officials continued to call for outright acknowledgment of a government role in the attack, which killed 259 aboard the airplane and 11 in the village where it crashed. This demand figured prominently in a meeting early last month among officials from the three countries.

In a statement to the Reuters news agency, Shalqam said today, "We have taken on the responsibility for this case on the basis of the international law, which states that the state takes on responsibility for what its employees do."

A Libyan intelligence agent, Abdel Basset Ali Megrahi, was convicted in 2001 by a Scottish court of carrying out the bombing and sentenced to life in prison. A second Libyan, Lamen Khalifa Fhimah, was acquitted by the court, which had convened on a former U.S. military base in the Netherlands under a deal reached after several years of negotiations.

Shalqam signaled that Libya was already preparing to compensate the victims' families. "The provisioning of that fund with the decided amount has started," he said. He added that Libyan and foreign businessmen were "participating in the collection of the money," apparently indicating that the government of Moammar Gaddafi would not directly participate in the program.

David L. Mack, vice president of the Middle East Institute, said Libya would set aside the equivalent of 40 percent of its hard currency to finance the fund. He said that this measure and Shalqam's new statement represent significant steps to resolve the international dispute.

"It represents a huge concession for any country to provide such a high proportion of its liquid assets to settle this," said Mack, a longtime observer of Libyan affairs. "This is a significant acknowledgment of responsibility."

If Shalqam's statement ultimately satisfies U.S. and U.N. demands, it could mark the end of a dispute that has caused years of anguish to the victims' families, as well as substantial economic losses to the Libyan economy and U.S. companies that would like to invest in its lucrative oil sector.

Under the compensation proposal, the United Nations would eliminate sanctions imposed on Libya in 1992 once an initial payment was made to the families. Those sanctions, which banned weapons sales and air travel to Libya, were suspended in 1999 when Gaddafi's government turned over the two suspects for trial, but they remain on the books until all U.N. conditions are met. Under U.N. resolutions, the Tripoli government must not only accept responsibility for the bombing and pay compensation but also renounce terrorism and disclose everything it knows about the attack.

Additional payments would prompt the United States to lift its own sanctions and remove Libya from the administration's list of countries sponsoring terrorism, according to U.S. sources familiar with the proposal. The Bush administration is still reviewing whether to endorse this plan, the sources said.

The State Department and representatives of the victims' families said the Libyan official's comments were encouraging but inconclusive.

"We've seen press reports but have heard nothing official from the Libyan government," said a State Department spokesman, Lou Fintor. "What's important is whether Libya meets United Nations requirements, not what its officials say to the press. Libya knows what it needs to do, and there are no shortcuts."

James Kreindler, a New York lawyer representing relatives of the victims, said that "giving an interview with one reporter in London isn't the same as making an official statement to the U.N." The Libyan official's statement, he said, "indicates Libya is moving toward accepting responsibility, but I wouldn't get too excited about it yet. It just means we're closer."

British Foreign Office Minister Mike O'Brien also said the discussions seemed to be "drawing toward a conclusion" but advised caution until the details were worked out. Negotiations among the United States, Britain and Libya over the Lockerbie case have been long and difficult, with earlier reports of breakthroughs evaporating once officials scrutinized the specifics.

A plaintiff in the lawsuit against Libya, Rosemary Wolfe, who lost her 20-year-old stepdaughter, Miriam, in the attack, expressed frustration with the progress in resolving the case. "It's been a constant effort trying to second-guess what the Libyans are up to," said Wolfe, who lives in Alexandria. "We're quite puzzled. It's in their ballpark to do something."

Mintz reported from Washington.

Pan Am Flight 103 left a huge crater in Lockerbie, Scotland, in December 1988 after a midair explosion that killed all 259 people aboard the plane and 11 on the ground. A Libyan intelligence agent was convicted in the bombing. Abdel Basset Ali Megrahi was sentenced to life in prison by a Scottish court in 2001. Lamen Khalifa Fhimah, Megrahi's co-defendant and a fellow Libyan, was acquitted by the court.