Libya has delivered a long-awaited letter to the United Nations, accepting responsibility for the 1988 Pan Am 103 bombing over Lockerbie, Scotland, that killed 270 people, the White House said.

Libya's letter to the U.N. Security Council stated that it "accepts responsibility for the actions of its officials" in the bombing, according to a statement Friday from White House press secretary Scott McClellan.

On delivery of the letter, a Libyan bank was to transfer $2.7 billion, or $10 million for each victim's family, into an escrow account as compensation for the bombing.

The delivery of the letter and the transfer of the compensation will prompt the United Nations to lift U.N. sanctions, which have been suspended since 1999, when Libya handed over two suspects in the bombing.

But a State Department official said Libya's expected action only "meets the minimum requirements" for satisfying U.N. Security Council resolutions, and would not trigger a lifting of separate sanctions the United States has in place against Libya.

"Libya does not deserve a clean bill of health," the official said, adding the United States "will retain a whole range of economic restrictions" against Tripoli which will only be removed when "concrete action is taken."

McClellan said the United States would not oppose the lifting of U.N. sanctions.

"In recognition of these steps and to allow the families' settlement to go forward, the United States has notified the U.N. Security Council that it will not oppose the lifting of U.N. sanctions on Libya which were suspended in 1999," the White House statement said.

The State Department official said the United States would likely abstain from the vote to lift sanctions.

McClellan said the "Libyan regime's behavior -- including its poor human rights record and lack of democratic institutions, its disruptive role in perpetuating regional conflicts in Africa, and its continued and worrisome pursuit of weapons of mass destruction and their related delivery systems -- remains a cause for serious concern."

In a meeting with victims' families Friday, Secretary of State Colin Powell and Assistant Secretary William Burns said the United States would keep its sanctions in place and continue to take a hard line toward Libya.

"The United States will intensify its efforts to end threatening elements of Libya's behavior and U.S. bilateral sanctions on Libya will remain in full force until Libya addresses these concerns. Libya must also continue to take definitive action to assist in the fight against international terrorism," the White House statement said.

The State Department official said Libya would also remain on the U.S. State Sponsors of Terrorism list.

McClellan said the U.S. stance should remind terrorists that Washington will always "seek justice and redress for its citizens."

The settlement had been complicated recently by French objections. It was reported earlier Friday that Paris was demanding time to try and persuade the Libyans to increase the far smaller compensation package previously agreed with the French government for the bombing of French UTA Flight 772 over Niger in 1989.

Although Libya never admitted to responsibility for that bombing, it nonetheless paid about $30 million to settle claims by the families of the 170 victims.

The French Foreign Ministry has said that "in the interests of fairness" it would now like to see that $30 million increased to bring it into line with the Lockerbie settlement, although no specific figures have been discussed.

Although U.S. officials have accused France of "intimidating the Libyans" by threatening to use their Security Council veto to delay the lifting of U.N. sanctions against Libya, the precise French position remained unclear.

U.N Secretary-General Kofi Annan, on vacation in Helsinki, Finland, has said he doubts that France would use its Security Council veto in this instance.

"I am not aware of the French threat to veto," he said, "But I would be surprised if it got that far."

Under the Lockerbie agreement, struck Wednesday, Libya has agreed to pay up to $10 million each to families of the 270 people -- 259 on the plane and 11 on the ground -- killed in the 1988 bombing of Pan Am Flight 103, en route to New York From London.

The U.S. sanctions were imposed in 1992, after Libya refused to turn over two Libyan officials accused of involvement in the bombing.

U.N. sanctions on Libya -- an air and arms embargo -- were suspended but not lifted in 1999 when Libya handed over two suspects for trial. One man was convicted and the other acquitted in 2001 after a trial in the Netherlands under Scottish law.

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