Abdel Basset Ali al-Megrahi, 48, was sentenced to life in prison with the possibility of parole, because of his age and the fact that he was serving a foreign government.
Al-Megrahi was convicted of being the one to have placed the bomb in a suitcase that went on a plane in Malta, tagged to be later switched onto Pan Am flight 103 at Frankfurt, where the deadly transfer did occur.
Al-Megrahi plans to appeal.
His co-defendant in the nine-month trial, Al-Amin Khalifa Fahima, was acquitted.
"In view of the verdict of the court, you are now discharged and free to go," said Lord Sutherland, one of the three Scottish judges, addressing Fahima.
He immediately left the courtroom and flew home to Libya.
Relatives of many of those who were killed in the bombing gasped as the verdict was read. Others broke into sobs, holding each other for support, hearing the verdict that took so many years to produce.
Jim Swire, who lost his student daughter in the blast, collapsed in the courtroom.
"Twenty years for killing 270 people is somehow not in keeping with the number of people murdered," said Peter Lowenstein, whose son Alexander was killed. "It amounts to less than one month per victim."
"After waiting 12 years, it was some level of justice," said Jack Flynn, father of murdered son John. "It will never bring your kid back."
President Bush says he hopes the verdict "will provide some comfort for the families" of those lost in the bombing.
The Bush administration is calling the conviction "a victory for an international effort" and the acquittal a question of Fahima not being found guilty, but also not being proven innocent.
White House spokesman Ari Fleischer says President Bush is calling on Libya to "satisfy certain requirements, including compensation of the victims' families and acceptance of responsibility for this act of terrorism before U.N. sanctions can be removed."
"Nothing can undo the suffering this act of terrorism caused," says Fleischer.
Libya's envoy to the U.N., Abuzed Dorda, says Libya had no involvement in the bombing and is shocked by the verdict.
Acting Deputy U.S. Attorney General Robert Mueller says the U.S. will not halt its efforts to pursue and convict any other individuals who may have been involved in the bombing.
"The United States remains vigilant," says Mueller.
The U.S. still has sanctions in place against Libya, including restrictions on trade and travel and a ban on American oil companies doing any business in Libya. President Bush said Wednesday the U.S. will maintain its sanctions against Libya and pressure the Khadafy regime to take responsibility for the bombing and compensate survivors of the victims.
Some of the victims' relatives are nonetheless worried that the administration might be tempted to lift the sanctions.
"The families have to maintain the pressure on this administration," says Susan Cohen, whose 20-year-old daughter Theodora died in the explosion. "We want to try to meet with Secretary of State Powell."
Daniel Cohen, Theodora's father, says the verdict does make an important statement, even though it includes one acquittal.
"The important thing is that the Libyan government has been indicted in this thing," says Cohen.
Victoria Cummock, who lost her husband, John, in the blast, and is president of the Families of Pan Am 103 Lockerbie group, is outraged by the weight of the punishment compared to the crime.
"Two hundred and 40 months (in jail) is less than one month per victim aboard that plane," says Cummock.
Most of the victims' relatives are now looking ahead to New York City, where the civil trial of the Pan Am 103-related lawsuit against Libya will be tried within the next few years.
The families, who shared a $500 million settlement of their lawsuit against Pan Am, are seeking billions of dollars in damages from Libya.
By Francie Grace
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