'He noted that a refusal of Megrahi's request could have had disastrous implications for British interests in Libya.'

Then the cable appeared to quote the ambassador saying: 'They could have cut us off at the knees, just like the Swiss.'

The warning is thought to refer to Gaddafi's call in 2008 for a jehad against the Switzerland when police arrested his son Hannibal and daughter-in-law Aline Skaf.

The couple were released and charges relating to an altercation with their servants dropped. However, Libya responded by withdrawing billions of dollars from Swiss banks, cutting off oil supplies, denying visas and recalling diplomats.