A spokesman at the Libyan foreign ministry has said that a settlement in the Lockerbie affair is within reach.

His comments came after what he described as fruitful talks between the United Nations secretary-general, Kofi Annan, and the Libyan leader, Colonel Gadaffi.

Mr Annan has been seeking Tripoli's cooperation in handing over the two men suspected of carrying out the bombing of a passenger plane over Lockerbie in Scotland in 1988.

Earlier, the British Foreign Secretary, Robin Cook, said he was encouraged by the talks.

But Mr Annan said there were still problems to be resolved.

Washington has expressed disappointment at the outcome.