UNITED NATIONS - UN Security Council diplomats were busy trying to prevent a French veto of a British resolution lifting UN sanctions on Libya for its compensation deal with the victims of the 1988 Lockerbie bombing.

The draft resolution was part of a deal worked out among Libya, Britain and the United States after years of frustrating negotiations. Under it, Libya is to pay 2.7 billion dollars into a Swiss bank account as compensation to the relatives of 270 victims who died in the 1988 Lockerbie airplane bombing.

Libya has said it would deposit the money as early as Tuesday.

Diplomatic sources said Council members were set to debate the proposal on Wednesday and that vote on the resolution was expected by Friday.

But France, which wields a veto on the council, has threatened to block the deal unless Tripoli increases compensation for victims of a different bombing in 1989 which destroyed a French UTA airliner and claimed 170 lives.

Libyan authorities have rejected the French demand as "blackmail." On Monday, Libyan leader Moamer Kadhafi's son said the UN sanctions would be lifted, anyway.

"The embargo will be lifted despite opposition from France," Saif al-Islam Kadhafi told Dubai-based Al-Arabiya news channel.

"While I sympathize with the French position, France's demand will be ignored, unfortunately (for Paris), and the embargo slapped on Libya will be lifted, Inshallah (God willing)," said Said al-Islam, who runs the Kadhafi Foundation involved in negotiations with families of the passengers and crew who perished in the UTA flight bombing.

The French UTA plane was on a flight from the Democratic Republic of Congo to Paris when it blew up over Niger on September 19, 1989. Ten months later, a Congo-Brazzaville national said a Libyan diplomat had given him an explosives-packed suitcase and instructed him to hand it to a passenger boarding the plane.

A 1999 agreement between Tripoli and Paris resulted in Libya's paying the equivalent of 30 million dollars to settle the case, paltry by comparison to the package the U.S. and British reached with Tripoli over Lockerbie.

The UTA bombing preceded that of Pan Am Flight 103 which exploded over Lockerbie, Scotland, on December 21, 1988, killing all 259 people on board and 11 on the ground. Most of the victims were U.S. citizens.

The Lockerbie compensation deal provides for Libya to pay 10 million dollars to the family of each victim, though U.S. officials said the sum could be reduced if the United States does not lift bilateral sanctions against Libya.

A group representing relatives of those killed in the UTA bombing said it was negotiating with a Libyan body for compensation matching that promised to relatives of the Lockerbie victims.

But the group is against France's use of its UN veto to block the Lockerbie deal, said Guillaume Denoix de Saint-Marc, the spokesman for the families of the 170 passengers and crew members who died.

"That has to be avoided at all costs because that would undermine" the deal to get compensation for both bombings, he said.

The United States said it would not oppose the lifting of UN sanctions and pressured France not to scuttle the Lockerbie deal.

"But ... the bilateral sanctions, our United States sanctions, will remain in place because we still have a number of serious concerns when it comes to Libya," White House spokesman Scott McClellan said. "We have no intention of lifting U.S. sanctions." State Department spokesman Richard Boucher, asked by reporters Monday whether he expected a French veto of the resolution said: "We would not want to see anything that would impede the Pan Am 103 settlement."

In fact, frantic last-minute talks had been held a day earlier to keep the resolution on track. The French foreign ministry said it would keep up contacts with officials in Libya, the United States and Britain in days ahead to resolve the issue.

The United Nations imposed an air, arms and diplomatic embargo on Libya in March 1992 to pressure Tripoli into handing over two suspects wanted in connection with the Lockerbie bombing.

In 1993 it froze Libyan assets abroad and banned other countries from providing Libya with oil refining and transportation equipment. The Security Council suspended -- but did not lift -- the sanctions in 1999.