DOCUMENTS relating to a key witness in the conviction of Abdelbaset al-Megrahi for the Lockerbie bombing would have “destroyed” the case had they been disclosed, a Scottish court has heard.

The downing of Pan Am Flight 103, en route from London to New York on December 21, 1988, killed 270 people in Britain’s worst terrorist atrocity.

Megrahi – found guilty of mass murder in 2001 and jailed for life with a minimum term of 27 years – was the only person convicted of the attack. He died in his home country in 2012 having been released from Greenock Prison on compassionate grounds.

A third appeal against his conviction began on Tuesday at the High Court in Edinburgh, sitting as the Court of Appeal.

Appeal judges have been told shopkeeper Tony Gauci identified Megrahi as resembling the man who bought clothing in his shop in Malta – which was later found in a suitcase containing the bomb.

The court heard documents in possession of the Crown revealed the witness had expressed frustration he would not be compensated for his part in the case.

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Gordon Jackson QC, one of the Megrahi family’s legal team, argued if the defence side at the trial had known about this they would have found other documents that show Gauci expressed an “interest in receiving money”.

The court was told two other factors – that Gauci was informed Megrahi was in an identification parade and inconsistencies in evidence – would have led to the Libyan’s acquittal. It heard the lawyers would have been able to change their “softly, softly” approach to questioning the witness and challenged his credibility.

Jackson said if this approach had been used, then “it is fairly obvious, in my submission, that we would not then have the position that we’re in of him being convicted”.

He added: “We have now reached a situation where there is no proper basis for having any credence or acceptance or reliability in that identification at all – that has a knock-on effect and destroys the whole case.”

Claire Mitchell QC, representing the Megrahi family, said yesterday that the identification in the dock was “virtually of no value” as it came not long after Gauci had seen a photo linking Megrahi to the bombing.

She added the case against Megrahi hangs on the date of purchase of the clothing and said the evidence on that issue does not bear the weight put on it. The court was told Gauci’s evidence, particularly in relation to the date of purchase, was not reliable and “grossly riddled with deficiencies, contradictions and inconsistencies”.

Mitchell urged the judges to acquit Megrahi.