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Britain has agreed to hold a Security Council vote early next week on lifting U.N. sanctions on Libya to give France more time to win a better deal from Tripoli for the victims of the 1989 bombing of a French airliner, a British diplomat said on Thursday.

"We have agreed a short extension with the French until early next week," the British diplomat told Reuters on condition of anonymity.

At France's request, the council had asked Britain and France to try to reach agreement -- and then report back to it -- on a reasonable delay for a vote to end the sanctions and thus close the book on the 1988 bombing of Pan Am Flight 103.

Britain had been pressing for a quick vote on ending the sanctions, imposed after the Pan Am jumbo jet was blown up over Lockerbie, Scotland, now that Libya has agreed to pay up to $10 million to each of the families of the 270 people killed.

A letter Libya sent to the Security Council last Friday, accepting responsibility for the Lockerbie bombing and agreeing to pay an expected $2.7 billion in compensation to the victims' families, capped 15 years of three-way negotiations with Libya on the Lockerbie atrocity.

But Paris, which has veto power in the Security Council, had then vowed to block the resolution while it pursued talks aimed at a better deal for the families of the 170 people killed in the bombing of a UTA jet over the West African state of Niger.

The expected Lockerbie payment dwarfs the $34 million handed over earlier by Libya for the downing of the jet from the defunct UTA airline, for which a Paris court found six Libyans guilty in absentia.

Individual payouts for the UTA victims have been put at $33,780 at most.

In Paris, the French Foreign Ministry had no immediate word that an agreement had been reached on a deadline for a vote to be held.

While Libya, Washington and London last week had hoped for a vote early this week, the British diplomat said London had been amenable to a short delay largely because the council had become preoccupied with the situation in Iraq after a deadly suicide bombing at the U.N headquarters in Baghdad.

In addition, their agreement had stipulated that a vote could not occur until Libya transferred the compensation to a special account at the Basel-based Bank for International Settlements, a process that was expected to drag on until Friday.

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