Condoleezza Rice will this week become the first US Secretary of State to visit Libya for more than half a century, in a move that appears to complete the former pariah state's transformation in its relations with the West.

The White House announced that Dr Rice would hold a meeting with Colonel Muammar Gaddafi, the Libyan leader, in Tripoli on Friday at the start of a four-day tour of North Africa.

Confirmation of the visit comes after a surge of business interest involving US companies, with a particular focus on Libya's energy sector.

Dr Rice, whose arrival is likely to coincide with the announcement of a bilateral trade and investment deal, will be the first Secretary of State to visit Libya since John Foster Dulles in 1953 and the highest-ranking US official to visit since that of Vice-President Richard Nixon in 1957.

"In that period of time, we’ve had a man land on the Moon, the internet, the Berlin Wall fall, and we’ve ten US presidents," Sean McCormack, a spokesman, said, announcing the visit.

The meeting marks the completion of an extraordinary U-turn in the policies of the Gaddafi regime, which came to power after a coup against King Idris I in 1969 and had almost no relations with the West between then and 2003, when a gradual thaw began.

Long deemed a state sponsor of terror, Libya's international reputation fell to an all-time low with the 1988 bombing of a Pan Am passenger jet, which killed 269 passengers and crew, including 180 Americans, over Lockerbie, Scotland.

That followed the 1986 bombing of the La Belle disco in Berlin, which killed three people, including two American soldiers, and injured 230. Following that attack, President Reagan ordered airstrikes on targets in Tripoli and Benghazi that Libyans say killed 41 people, including Colonel Gaddafi’s adopted daughter.

Some families of the Lockerbie victims object to Dr Rice’s planned visit, arguing that it will give Libya international legitimacy at a time when they question whether the regime has accepted full responsibility for the attacks.

"It is absolutely horrible beyond belief that Condoleezza Rice will go and meet with the murderer of my child," said Susan Cohen, whose daughter, Theodora, was a passenger on Pan Am flight 103. "There is no change; this is the same old Muammar we’re talking about," she said.

Mr McCormack said that Dr Rice and other officials understood such concerns but emphasised that the settlement was important. "That, by no means, brings back those people that were lost," he said. "But it does provide some measure of closure for those family members and those friends of people who were lost in these acts of terror."

David Welch, the top US diplomat for the Middle East who negotiated at length with Libya, said that Colonel Gaddafi’s change of course on nuclear, chemical and biological weapons and terrorism represented a foreign policy success for the Bush Administration, which now deals with Libya on issues from the situation in Darfur to Iran and the War on Terror.

"This is a relationship that has had a troubled past, but now it is on a much firmer foundation," Welch said. "He as leader has undertaken some decisions which have changed things, and it’s important to recognise that."

Lockerbie families' claims that Libya had shown no remorse for its previous role in terrorism — and that its transformation had been purely strategic — appeared to be strengthened last week when Saif al-Islam Gaddafi, Colonel Gaddafi's son, said that Libya had accepted responsibility for the attack only to get international sanctions lifted. "It doesn’t mean that we did it [the Pan Am attack], in fact," he said.

He added that the families of Lockerbie victims had traded "with the blood of their sons and daughters" and were "very greedy". "They were asking for more money and more money and more money."

In 2003, Libya began its transformation in relations with the West when it agreed to pay the family of each victim. The final instalment is to be paid after Dr Rice's visit.

Relations with the European Union have gradually warmed since then, with a number of high-level visits to Tripoli, including that of Tony Blair before he stood down as British Prime Minister last year. Last week, a “friendship deal” worth billions of pounds was signed by the Italian and Libyan leaders as part of a package of investment and reparations for 32 years of colonial rule

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