Libya says it has agreed a compensation deal with relatives of the 170 people killed in the bombing of a French UTA airliner in 1989 - but Paris will not confirm the statement.
The UTA bombing claimed 170 lives
"The problem over the UTA case is over and the Lockerbie case is now behind us. We are opening a new page in our relations with the West," Colonel Muammar Gaddafi said in an address to the nation.
Colonel Gaddafi did not admit Libyan guilt in the speech, which marked the anniversary of a coup which bought him to power 34
The French foreign ministry said it could not yet confirm that a deal had been reached, although it said constructive negotiations were continuing.
Lawyers representing the families of bombing victims adopted a similar position.
"We are very, very close to an agreement, but everything has not yet been settled. A fair and satisfactory agreement in principle has
been reached," Francis Szpiner, one of the lawyers, told AFP news agency.
Tripoli's ambassador to London, Mohammed al-Zuai, said the deal was finalised in a telephone conversation between French President Jacques Chirac and Colonel Gaddafi.
"During the telephone conversation between Chirac and Gaddafi,
they agreed on this issue and announced that the accord was
satisfactory to both parties," Mr Zuai said.
A lawyer advising the Libyan Government told the BBC that details of the agreement would be announced on Monday.
Colonel Gaddafi said in his speech that Libya did not take responsibility for the Niger or Lockerbie bombings and that the money was not a compensation payment.
He said Libya was simply paying a price to get its name struck off the list of countries that support terrorism, the BBC's Magdi Abdelhadi says.
He did not mention that Washington has not agreed to remove Libya from its terror list, our correspondent says.
Francoise Rudetzki, another lawyer for the relatives of those travelling on the aircraft which went down over Niger, said "nothing has been signed", although a settlement was "perhaps imminent".
Representatives of the French families had travelled to the Libyan capital, Tripoli, on Saturday for surprise talks with government officials.
Guillaume Denoix de Saint Marc, a spokesman for the families, said the relatives had "spent a sleepless night and the entire day negotiating".
France has said it will not support a British draft resolution to lift United Nations sanctions on Libya until families of the French victims get a deal comparable to the $2.7bn paid to relatives of the Lockerbie air disaster victims.
Libya initially termed the French demand "blackmail", but
recently suggested that a compromise offer for the UTA families
might be possible.