Abdelbaset al-Megrahi, the only man convicted for the Lockerbie terrorist outrage of 1988, returned home to Libya to a hero's welcome after being released from jail in Britain.

Megrahi, suffering terminal cancer and freed on compassionate grounds, was greeted in Tripoli by hundreds of people waving flags, including the Scottish Saltire, despite no official announcement.

In a statement released by his lawyer in Britain, he denounced his eight-year imprisonment in Scotland as "nothing short of a disgrace".

Families of the 270 victims of the Lockerbie outrage were assured that there would be no hero's welcome for the former Libyan secret agent.

US President Barack Obama criticised his release as a mistake.

"We have been in contact with the Scottish Government, indicating that we objected to this and we thought it was a mistake."

He said he was pressuring Libya to keep Megrahi under house arrest.

Megrahi's release brings to an end his long-running protests of innocence and appeals against his conviction in January 2001, at a trial held under Scottish law in the Netherlands.

But the release raises questions about British motives, with the Government pushing a more open relationship with Libyan leader Muammar Gaddafi while the petroleum giant BP explored his country for new oil deposits.

Megrahi was taken to his family home where his wife, Aisha, said she was "overjoyed".

"It is a great moment, which we have been waiting for for nine years," she said. "The house is full to bursting, everyone who loves Abdelbaset is with us."

Only hours before, dressed in a long white tracksuit and baseball cap, his skin sallow and hair grey, Megrahi appeared a stooped and frail figure as he left British soil for the last time.

The 57-year-old former intelligence officer continued to protest his innocence as he was released.

In a statement read on his behalf by his lawyer, he said: "To those victims' relatives who can bear to hear me say this: they continue to have my sincere sympathy for the unimaginable loss they have suffered. To those who bear me ill will, I do not return that to you."

Relatives of Americans killed in the 1988 attack said they were appalled by Megrahi's release.

Susan Cohen of New Jersey, whose 20-year-old daughter Theodora died in the bombing, said it was "so sickening I can hardly find words to describe it".

"This isn't about compassionate release. This is part of give Gaddafi what he wants so we can have the oil. You want to feel sorry for anyone, please feel sorry for my poor daughter, her body falling a mile through the air."

Describing his ordeal, Megrahi said his incarceration in an alien culture separated from his family had proved a "profound dislocation".

"I cannot find words in my language or yours that give proper expression to the desolation I have felt. This horrible ordeal is not ended by my return to Libya.

"It may never end for me until I die. Perhaps the only liberation for me will be death. And I say in the clearest possible terms, which I hope every person in every land will hear: all of this I have had to endure for something that I did not do.

"The remaining days of my life are being lived under the shadow of the wrongness of my conviction," Megrahi continued.

"I have been faced with an appalling choice: to risk dying in prison in the hope that my name is cleared posthumously or to return home still carrying the weight of the guilty verdict, which will never now be lifted."

The carefully choreographed day of events which engendered raw emotions on both sides of the Atlantic began when Justice Secretary Kenny MacAskill announced his decision on behalf of the Scottish Government to free Megrahi at a packed lunchtime news conference in Edinburgh.

It was scheduled to coincide with breakfast news bulletins in the United States, where the bulk of the Lockerbie victims came from.

MacAskill revealed he had rejected an application to free the Libyan under a prisoner transfer agreement negotiated by Tony Blair and Gaddafi.

He said that senior US Government figures, including Attorney-General Eric Holder and the American families had received British assurances at the Camp Zeist trial that Megrahi would serve his sentence in Scotland, a guarantee that had given the victims' relatives considerable comfort.

The British Government, however, insisted no such assurances had been made and declined to explain what, if any, discussions had taken place - a move MacAskill described as "highly regrettable".