ASHINGTON, May 28 - Libya has offered to pay $2.7 billion in compensation to the families of the 270 people killed in the 1988 crash of Pan Am 103, according to government officials and a lawyer representing the families. But the lawyer said the offer was made on the condition that the United States and the United Nations dropped their sanctions against Libya.
The offer amounts to paying $10 million for each victim of the bombing, including the 259 passengers and crew members on the Boeing 747 and the 11 people killed on the ground when the aircraft plunged into the village of Lockerbie, Scotland.
Under the offer Libya would pay $4 million for each victim when United Nations sanctions were lifted, $4 million when American sanctions were removed, and $2 million when the United States took Libya off the list of states that sponsor terrorism.
The offer, which would resolve a civil suit, does not include an admission of responsibility by Libya. But the governments of the United States, the United Kingdom and Libya are negotiating a statement to that effect and are scheduled to meet again in June in London.
Lee S. Kreindler, a lawyer representing 118 of the victims said today that he expected Libya to accept responsibility for the bombing. But a White House official said tonight that the offer did not cover that issue.
As a result, the official said, "this is a necessary step, but it is not sufficient."
It was not clear tonight that all the families would accept the offer, which would put them in the position of favoring dropping punishment of the Libyans.
"It is a terrible position to put us in," said Susan Cohen, of Port Jervis, N.Y., whose only child, Theodora, then 20, was on board the plane. "You could give me $50 million, do you think I'm going to betray my kid's memory and suddenly become a cheering section for the Libyans?"
The offer follows, by 16 months, the murder conviction of Abdelbaset Ali Mohmed al-Megrahi, a Libyan intelligence official, in a Scottish court convened in the Netherlands to determine Libya's role in the crash.
Senator Charles E. Schumer, Democrat of New York and the sponsor last year of legislation that extended trade sanctions on Libya for five years, said the offer could provide an "impetus" for easing sanctions only if it could be determined that the nation no longer backed terrorism.
"This is a very generous offer to the families which shows that sanctions on terrorist nations work," Mr. Schumer said. "But the fundamental question is, has Libya completely stopped aiding and abetting terrorism in every way."
The House and Senate last July overwhelmingly approved extending the sanctions on both Libya and Iran even though President Bush had sought to limit the sanctions to two years. The president signed the five-year extension in August 2001. The offer today followed months of negotiations in Paris between a lawyers committee headed by Mr. Kreindler and lawyers for the Libyans.
The trial that resulted in the conviction of Mr. Megrahi was held under an extraordinary arrangement negotiated with Col. Muammar el-Qaddafi, the Libyan leader, in exchange for a suspension of United Nations sanctions.
In a statement issued by Mr. Kreindler's law firm, Mr. Kreindler's son, James P., said, "These are uncharted waters."
"It is the first time that any of the states designated as sponsors of terrorism have offered compensation to families of terror victims."
Among the American families, who received compensation from Pan Am's insurance company following the crash, many survivors say they are more interested in having Libya accept responsibility for the crash, rather than spread around its oil wealth.
"I don't even want to talk compensation right now," said M. Victoria Cummock, who was widowed by the crash. "This is a premature issue, until the U.N. Security Council demands have been met, for them to renounce terrorism, acknowledge that they did this, and accept responsibility."
Mr. Kreindler would not say whether the offer was conditional on all the families' agreeing to it.
The plane, en route from London to New York, exploded over Lockerbie on Dec. 21, 1988.
The offer seeks to settle a suit brought by the families after Congress passed a law in 1996 allowing United States citizens to sue foreign governments if the State Department defined those governments as state sponsors of terrorism.
The Americans who were held hostage in Iran for 444 days in 1979, 1980 and 1981 are using the same law to seek damages from that government. A district court judge in Washington recently ruled that the hostages were not eligible for compensation. That ruling is being appealed.
A spokesman for the State Department confirmed this evening that an offer had been made, but said it was a matter between the families and the Libyans. The spokesman, who asked not to be named, said that outstanding issues included "recognition of responsibility and renunciation of terrorism."
The offer "hasn't caused the State Department today to review suddenly our position on all this," he said. But he added that when the department reviewed its policy toward Libya it would take into account what the families decided to do.
"Their views would certainly be a major element of any findings we made vis-à-vis compensation," he said.
"If families come to us and say, we've accepted such and such a deal, that will be an element in our analysis at some point," he said.
The sum, $2.7 billion in all, is extremely large for a crash case.
Hans Ephraimson-Abt, a victims-rights advocate, said $10 million a person was unprecedented for a planeload of people. "A widow whose husband made a million dollars a year would get $10 million," he said.
Mr. Ephraimson-Abt, whose daughter was a passenger on Korean Air Lines 007 when it was shot down by the Soviets, and who has been deeply involved in numerous crash cases since then, said the families of the teenagers from Montoursville, Pa., who were killed on TWA 800, got $2.6 million.
In general, when courts figure economic damages, the lives of teenagers are valued at less because they are seldom breadwinners.
But Mr. Ephraimson-Abt said there had been previous reports of offers by the Libyans over the years. "When I see the money I'll believe it," he said.