CAROL COSTELLO, CNN ANCHOR: Now to a new chapter in a story of terror the FBI helped investigate more than a decade ago. The government of Libya has come forward with a settlement plan for survivors of the PanAm Flight 103 victims. But as CNN's Andrea Koppel reports, the offer has strings attached.</s>ANDREA KOPPEL, CNN CORRESPONDENT (voice-over): Word of the Libyan offer, more than 13 years after PanAm Flight 103 exploded over Lockerbie, Scotland, came with a lot of ifs. "Dear Clients," began a letter from the attorney for many of the victims' families, "We've finally obtained a settlement offer from Libya that we recommend to you." The bottom line? Libya's Moammar Gaddafi is offering $2.7 billion in installments if U.S. and U.N. sanctions are lifted and if Libya is removed from the U.S. list of state sponsors of terrorism. Bert Ammerman lost his brother Tom in the Lockerbie bombing and says the Libyan offer deserves serious consideration.</s>BERT AMMERMAN, VICTIMS OF PANAM FLIGHT 103: The tentative agreement is a very serious offer that I think the family members are going to have to consider when you say $2.7 billion. So this is an opportunity to meet one of the criteria that Libya had to meet to have the sanctions lifted by the U.N. So that I think this is a major positive step forward.</s>KOPPEL: But the State Department says that's not how it works. Before sanctions can be lifted, it says Libya must not only pay compensation and accept responsibility for the Lockerbie bombing, it must also renounce terrorism and agree to cooperate in future investigations. Libya has already cooperated with a trial before a Scottish court, which convicted one former Libyan intelligence agent and acquitted another. (on camera): Publicly the State Department says the decision to accept or reject the Libyan compensation package rests with the victims' families. But privately one State Department official admitted Gaddafi's offer, even though conditional, is encouraging, another small step in the right direction. Andrea Koppel, CNN, at the State Department.
Libya Comes Forward With Settlement Plan for Survivors of PanAm Flight 103 Victims