The Government is under growing pressure to hold Libyan defector Musa Kusa to account for the Lockerbie bombing and the murder of Pc Yvonne Fletcher.
David Cameron has insisted that Colonel Muammar Gaddafi's former intelligence chief has not been offered immunity and that police and prosecutors would not be obstructed.
But ministers face the dilemma that arresting and charging him may discourage further defections from Gaddafi's regime.
British intelligence is thought to be talking to up 12 senior figures in the Libyan regime about deserting the embattled Libyan dictator.
Separately, it was reported by The Guardian that one of Gaddafi's most trusted envoys, Mohammed Ismail, had visited London in recent days for secret talks.
Scottish prosecutors have asked to interview Kusa, who resigned as Libya's foreign minister this week, about the 1988 Lockerbie bombing. He is currently at an undisclosed "safe location" in the UK being debriefed by diplomats and officials.
Jim Swire, whose daughter Flora was killed in the bombing, said he thought Kusa "knows everything". "He was clearly running things," said Dr Swire. "If Libya was involved in Lockerbie, he can tell us how they carried out the atrocity and why."
Before becoming foreign minister in 2009, Kusa had been head of Gaddafi's feared intelligence agency since 1994 and was a senior intelligence agent at the time of the bombing of Pan Am flight 103 over the Scottish town of Lockerbie, which killed 270.
It was not immediately clear whether prosecutors want to question him as a suspect in planning the atrocity or as someone who is certain to hold vital information because of his position in the Gaddafi regime. He is believed to have played a key role in securing the release of the only man convicted of the Lockerbie killings, Abdelbaset al Megrahi.
Both the Prime Minister and Foreign Secretary William Hague stressed on Thursday that Kusa had not been offered immunity from prosecution in return for information he may be able to provide about Gaddafi's military struggle with rebel forces.