Relations between London and Edinburgh plummeted yesterday as a dispute over a Libyan jailed for the Lockerbie bombing provoked the first clash with the Nationalist-run Scottish Government.

Alex Salmond, Scotland’s First Minister, accused Tony Blair of striking a secret deal with Colonel Muammar Gaddafi that would enable the bomber to be transferred to Libya.

The dramatic claim by Mr Salmond, who leads a minority Nationalist administration, drew some irritation in Whitehall. Government sources in London said that the bomber, Abdelbaset Ali Mohmed al-Megrahi, could be moved to Libya only with the agreement of the Scottish Executive and were puzzled at what caused Mr Salmond’s outburst.

The row began when Mr Salmond made an emergency statement at Holyrood, telling MSPs that he had voiced “concern” to Mr Blair over an agreement signed with Libya when the Prime Minister visited Colonel Gaddafi last week. Mr Salmond said that he was protesting against a memorandum of understanding on judicial cooperation, which he told MSPs included extradition arrangements and the issue of prisoner transfers.

Scottish government sources later claimed that, while the agreement did not mention al-Megrahi by name, it was clearly drawn up with him in mind.

Ministers claimed that it was a clear breach of the formal agreement signed in 1999, which said that the British Government recognised that devolved administrations would have an interest in international relations where any implementation was required.

Al-Megrahi is serving a life sentence in Scotland after being convicted in 2001 of smuggling a bomb on board the Pan Am flight that crashed on to Lockerbie in December 1988, killing 270 people.

His case is being reviewed by the independent Scottish Criminal Cases Review Commission.

Mr Salmond’s tone was taken up by opposition parties. Jack McConnell, Labour’s leader in Scotland, said: “As former First Minister I would have expected and demanded no less than prior consultation on such a memorandum.”

Annabel Goldie, leader of the Scottish Conservatives, said: “Tony Blair has quite simply ridden roughshod over devolution and treated with contempt Scotland’s distinct and independent legal system.”

Downing Street issued a statement saying that no agreement had been reached on the al-Megrahi case. It said: “There is a legal process currently under way in Scotland reviewing this case which is not expected to conclude until later this summer. Given that, it is totally wrong to suggest that we have reached any agreement with the Libyan Government in this case. The memorandum of understanding agreed with the Libyan Government last week does not cover this case.”

Death and the long road to justice

Dec 21, 1988 Pan Am Flight 103 explodes over Lockerbie, killing all 259 people on board and 11 in the town

Nov 14, 1991 US and Britain accuse two Libyans of crime

March 31, 1992 UN Security Council resolution tells Libya to surrender suspects

Dec 11, 1996 Abdelbaset Ali Mohmed al-Megrahi willing to stand trial in a neutral country

May 3, 2000 Trial opens in Camp Zeist in the Netherlands under Scots Law. Two men accused of conspiracy, murder and contravention of the Aviation Security Act 1982

Jan 31, 2001 Al-Megrahi found guilty of mass murder and jailed for life. Al Amin Khalifa Fhimah is found not guilty and freed

Aug 14, 2002 Libya agrees compensation for victims

June 7, 2007 Alex Salmond, First Minister, expresses concern over a deal by which al-Megrahi may go to Libya

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