Families of 170 people killed in the 1989 bombing of a French UTA airliner blamed on Libyans say they expect to sign a compensation deal as part of Tripoli's bid to normalise its relations with the West.
Libya pledged last month to scrap its banned arms programmes after having earlier agreed compensation for the 1988 Lockerbie bombing, but France wants a settlement of the UTA compensation to be part of any full reconciliation.
France's Foreign Ministry said Libyan Foreign Minister Mohamed Abderrhmane Chalgam would meet his French counterpart Dominique de Villepin in Paris on Friday for talks and a joint news conference, without giving further details.
Saad Djebbar, a London-based Algerian lawyer acting as an adviser to Tripoli, told Reuters the two would sign a "political agreement" linked to the payout, which families said they expected to be finalised by then.
"We are trying to reach an accord for tomorrow," Guillaume Denoix de Saint Marc, whose father died in the attack and has been negotiating with Libyan officials this week, told Reuters.
Djebbar did not disclose details of the payout. Libyan sources have previously said it would be much smaller than the $2.7 billion compensation agreed for the Lockerbie families.
In a New Year's speech to French diplomats, President Jacques Chirac briefly alluded to an "expected settlement" of the UTA compensation without giving any timeframe.
He said that once finalised, the settlement would "allow Libya to reintegrate itself fully in cooperation initiatives between the two shores of the Mediterranean". Separately, his office said Chirac too would meet Chalgam on Friday.
France threatened last year to veto the lifting of U.N. sanctions on Libya after Tripoli agreed to pay compensation for the bombing over Lockerbie, Scotland, a deal that dwarfed an initial $34 million settlement for the UTA attack.
It finally relented after Libya said it would increase compensation for the French airliner bombing over the west African state of Niger, for which six Libyans were convicted in absentia by a French court.
Subsequent negotiations with a private fund run by Libyan leader Muammar Gaddafi's son have proved stickier than expected, with Libyan officials unveiling conditions for the payout.
Those conditions included an agreement on the fate of the six Libyans convicted in absentia - who Tripoli maintains are innocent - and the creation of a Franco-Libyan "friendship pact".
Victims' group SOS Attentats, which has also been involved in talks, welcomed the prospect of the payout deal being recognised officially by the two countries.
"It seems an accord will be signed at state level tomorrow. We have always said that is preferable and in line with what happened over Lockerbie... The accord is then more valid legally and politically," an SOS Attentats spokeswoman said.