The Appeal Court in Edinburgh is to appoint a special defender to view confidential documents wanted by the Lockerbie bomber in his appeal.
It follows an extraordinary hearing held behind closed doors at which the UK Government argued that revealing the documents would compromise security.
Libyan national Abdelbaset ali Mohmed al-Megrahi is serving life for killing 270 people in the 1988 bombing.
He has been granted leave to appeal against his conviction.
The appointment of a special defence lawyer is the latest twist in the attempt to have his conviction overturned.
The UK Government argued last month it should not be forced to hand over highly confidential documents wanted by Megrahi's legal team.
Foreign Secretary David Milliband said to publish the documents, sent to the government by an un-named foreign power, would compromise Britain's national security.
The advocate general, who represents the UK government in Scottish courts, asked the court to appoint a security-vetted lawyer who could look at the documents on Megrahi's behalf.
"In no country can the situation be allowed where the accused or the appellant is not free to have his own defence team, and instead someone is imposed upon him"
He would then argue which parts of the document should be published - although judges would make the final decision about how much, if any, should be revealed.
So far the court has not published its decision, but in a letter seen by BBC Scotland, the Foreign Office minister Kim Howells says it has decided to appoint a special defender.
It will be the first time such a course has been taken in Scotland, although some English courts have appointed special defenders to examine evidence in terrorism cases.
There has been no official comment from Megrahi's legal team, although it is thought they are planning an appeal to the Privy Council, arguing the move will violate his human rights.
Dr Hans Koechler, the United Nations special envoy to the trial in the Netherlands of the two Libyans accused of the Lockerbie bombing, criticised the development as "intolerable".
In a BBC interview, Dr Koechler said it was "detrimental to the rule of law."
He said: "In no country can the situation be allowed where the accused or the appellant is not free to have his own defence team, and instead someone is imposed upon him."
It is expected the full appeal by Megrahi, who is serving his life sentence in Greenock Prison, will be heard next year.
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