Megrahi's second appeal against his conviction started this year
US Secretary of State Hillary Clinton has personally urged Scotland's justice secretary not to free the man convicted of the Lockerbie bombing.
A spokesman said she "expressed strongly" the view to Kenny MacAskill that Abdelbaset Ali al-Megrahi should serve out his sentence in Scotland.
Earlier it was confirmed the Libyan had applied to abandon his appeal against his conviction.
Terminally-ill Megrahi is serving a life sentence at Greenock Prison.
On Wednesday BBC News revealed that Kenny MacAskill was likely to announce next week that Megrahi, who is gravely ill with prostate cancer, would be released on compassionate grounds.
US State Department spokesman Philip Crowley said there were "compelling reasons" why Megrahi should remain in jail.
He said: "Our interest is justice, and our interest is the commitment that we made to the families that we would find the perpetrator of this terrorism act, bring him to justice, working with the United Kingdom and with Scotland.
"He was brought to trial. He had a fair trial. He was convicted. He's serving his time. And we think he should stay in jail."
Mr MacAskill is also considering a request from the Libyan government for Megrahi to be returned to Libya under a prisoner transfer deal with Britain.
Abandoning his appeal could pave the way for his return home because a transfer cannot take place if criminal proceedings are active.
The Scottish government said no decision had yet been taken on Megrahi's future and insisted no pressure had been put on him to abandon his appeal.
But South of Scotland SNP MSP Christine Grahame, who has met Megrahi several times in prison, said she believed he had been put under pressure.
Brian Taylor, BBC Scotland political editor
The Scottish legal system might well welcome closure of this protracted, challenging case.
The counter point of view, advanced by Nationalist MSP Christine Grahame among others, is that Scottish justice is better served by persisting in efforts to dig out the truth.
Then there is the issue of compassion. Megrahi is said to be terminally ill with prostate cancer. Regardless of other issues, should the justice secretary pay heed to that?
Either way, relatives of those who died are decidedly not content.
There are those who believe that Megrahi is guilty and who say there should be no deal whatsoever: he should remain in jail in Scotland.
Those who believe he is innocent - and consequently welcome his release - nevertheless are voicing distress that the emerging shape of events means that the search for further information will be stalled.
She said: "I know from the lengthy discussions I had with him that he was desperate to clear his name, so I believe that the decision is not entirely his own.
"There are a number of vested interests who have been deeply opposed to this appeal continuing as they know it would go a considerable way towards exposing the truth behind Lockerbie.
"Some serious scrutiny will be required to determine exactly why Mr Megrahi is now dropping his appeal and examination of what pressure he has come under."
She renewed her calls for a full public inquiry into the bombing.
She added: "In the next days, weeks and months new information will be placed in the public domain that will make it clear that Mr Megrahi had nothing to do with the bombing of Pan Am 103."
Megrahi is the only person to be convicted over the 1988 bombing which claimed 270 lives.
His lawyers said he had applied to the High Court in Edinburgh two days ago to abandon his appeal against conviction.
A spokesman for the legal firm Taylor and Kelly said: "As the appeal hearing has commenced... leave of the court is required before the appeal can be formally abandoned."
A court hearing to discuss the application will take place in Edinburgh next Tuesday.
'Cloak and dagger'
Conservative justice spokesman Bill Aitken said clarity was needed from the Scottish Government.
"Too much of this story has been characterised by secret briefings, hints of special deals and international cloak and dagger," he said.
"The Lockerbie atrocity cannot descend into this kind of diplomacy by spin and stealth."
He said there needed to be "compelling medical evidence of extreme ill health" before any release on compassionate grounds.
First Minister Alex Salmond said the Scottish Government denied any pressure had been placed on the Libyan to drop his second appeal.
Speaking in Edinburgh before Megrahi's application to drop his appeal was announced, he said: "We have no interest in pressurising people to drop appeals, why on earth should we?
"That's not our position - never has been."
He added: "Nothing that the Scottish Government has done or said suggests pressure on anybody to do anything."
He also said the issue would not be discussed at cabinet on Tuesday, saying it was a judicial matter, not a political one.
"This is a matter the justice secretary must determine and he must do it purely on judicial grounds, which is what he's been doing," he said.
Megrahi was convicted of murder in January 2001 at a trial held under Scottish law in the Netherlands.
A first appeal against that verdict was rejected the following year.
His second appeal got under way this year but shortly afterwards applications were made for both his transfer to a Libyan jail and release on compassionate grounds.
Separately, the Crown Office is appealing against the length of the sentence handed out to Megrahi.
A Crown Office spokesman said that its appeal remained live.
The spokesman would not be drawn on whether that appeal would be dropped alongside Megrahi's appeal against conviction.