Police and investigators inspect the remains of the flight deck of Pan Am 103 in a field in Lockerbie, Scotland, on Dec. 22, 1988. (Associated Press)

Scotland's government denied it has already decided to release Lockerbie bomber Abdel Basset Ali al-Megrahi on compassionate grounds, saying that decision hasn't yet been made.

British broadcasters Sky News and BBC reported Wednesday that al-Megrahi, who is terminally ill with prostate cancer, could be freed from prison as early as next week.

However, Scotland's justice minister said all of the case information has yet to be reviewed.

"Clearly, he is terminally ill, and there are other factors," Scottish Justice Minister Kenny MacAskill told the BBC. "But I have made no decision as yet."

MacAskill said it was now clear to him that he would have to act as speedily as possible.

Abdel Basset Ali al-Megrahi heads into a Libyan court in 1992. (Jockel Fink/Associated Press)

Al-Megrahi is serving a life sentence for murder in the bombing of Pan Am Flight 103, which exploded over the Scottish town of Lockerbie on Dec. 21, 1988. All 259 people on board the London-to-New York flight were killed, including two Canadians. Most of the victims were American.

Eleven people on the ground were killed when the plane's fuel-laden wing section fell on a residential area and exploded.

The former Libyan secret service agent was convicted of putting an explosives-laden suitcase on a plane in Malta, which was transferred to the doomed flight in London via Frankfurt.

According to reports, the decision to release al-Megrahi was influenced by the hope he could be back in Libya with his family in time for Ramadan next week.

Oliver Miles, a former British ambassador to Libya, told Reuters he believes the news was leaked in order to gauge public opinion on the case.

Families of victims split

Victims' families were divided over the news.

Susan Cohen, an American whose 20-year-old daughter Theodora died in the attack, called the idea "simply horrible."

"I'm sick of hearing about compassion and sympathy," she told Sky News in an interview from her New Jersey home. "If you send him back, he'll be a hero."

Bert Ammerman, who lost his brother Tom in the disaster, said releasing him would be "insane, immoral, reprehensible."

"He should finish out his term in Scotland, pass away and then send him home in a casket," Ammerman told Reuters.

Mourners stand together at the Lockerbie memorial garden at Dryfesdale cemetery in Lockerbie, Scotland in December 2008. (David Moir/Reuters)

The spokesman for a group of some of the British relatives offered an opposing view.

"I am someone who does not believe he is guilty," said Dr. Jim Swire, whose 24-year-old daughter Flora was on the flight. "The sooner he is back with his family, the better."

Al-Megrahi has maintained his innocence since his 2001 conviction. He was allowed to appeal his conviction in 2007 following a Scottish judicial panel ruling that he may have suffered a "miscarriage of justice."

Pamela Dix, whose brother Peter died in the bombing, said she would like to see the appeal process continue in Scotland because she's not convinced of al-Megrahi's guilt.

Libya pays compensation

Al-Megrahi's lawyers argued that British and American officials ignored witness statements and interfered with evidence suggesting the bombing was an Iranian-financed plot carried out by Palestinians.

They contend Tehran hatched the plot as revenge for the shooting down of a civilian Iranian jet by the U.S. military several months earlier.

At the time, Iran offered a $10-million reward for anyone who could avenge the attack. There was much speculation a Syrian-based Palestinian group took up the offer and carried out the Lockerbie bombing.

But the investigation veered away from the Palestinians and shifted to Libya, leading some to speculate it was politically motivated because Washington needed the support of Syria and Iran during Iraq's 1990 invasion of Kuwait.

In 2003, the Libyan government agreed to pay $270 million US in compensation to families of the Lockerbie victims under a deal that paved the way for the lifting of UN sanctions against Moammar Gadhafi's administration.

Still, Libyan authorities have never formally admitted guilt.

With files from The Associated Press