The United Nations Security Council on Friday lifted the 11-year-old sanctions against

Libya, paving the way for families of each of 270 victims of the 1988 bombing of Pan Am flight over Lockerbie, to get first instalment of US $4 million as compensation.

The US, which has decided not to lift its own bilateral sanctions, and France, which is seeking higher compensation for families of victims of bombing of its own aircraft for which it blames Libya, abstained.

The remaining 13 members of the Council voted for the resolution.

The vote came after France lifted its threat to veto the resolution following an agreement between representatives of victims of 1989 bombing and Libya promising a higher compensation, the details of which are yet to be worked out.

Under the agreement with the US, Libya has put $2.7 billion for the families of victims of the Pan Am Bombing.

Out of this each family would get $4 million immediately. They will get another $4 million after the US lifts bilateral sanctions, which include a ban on sale of Libyan oil to America.

Another $2 million would be paid to each family after the US removes Libya from the list of countries supporting terrorism.

If the US, however, does not take any action within eight months then each family would get only $1million more.

France was embarrassed when the United States reached an agreement under which Libya agreed to pay families of each of 270 victims of Pam Am flight up to $10 million as Paris had earlier accepted $33 million for 170 victims of the UTA flight, which gave only $194,000 as compensation to each family.

So, the vote was held up for about a month after Washington reached an agreement on Aug 15 last as France threatened veto unless Libya agreed to pay higher compensation for the victims of UTA flight.

France lifted the threat of veto after an agreement was reached between representatives of victims and a Libyan foundation promising additional compensation though amount is yet to be decided.

The Council imposed the sanctions in 1992 to force Libya to handover two indicted men for trial in the 1988 Pan Am bombing over Lockerbie in Scotland.

Once they were turned over in April 1999, the sanctions against Libya were indefinitely suspended -- but Libya pressed for the embargoes to be lifted to restore its standing in the world community.

Family members of several victims watched the proceedings of the Security Council from the galleries, which are normally empty. Later, they expressed satisfaction with outcome and several supported the American decision to continue its own sanctions against Libya till it fully renounces terrorism.

Some said those tried were just acting on orders of their higher ups and they too should also have been tried.

In Tripoli, Libya welcomed the lifting of the sanctions and appealed to all nations to open dialogue with Libya.

"We welcome the Security Council decision, which shows that Libya has kept all its promises with and respects international law and legality," Mohammed al-Zuai, the Libyan ambassador to UK and the official in charge of Lockerbie negotiations was quoted as saying by an international agency.

In London, Foreign Secretary Jack Straw also hailed the UN move saying it would begin new chapter in the country's relationship with the international community.