* Minister outlined steps to compassionate release-report
* Based on 480 U.S. cables on Libya obtained by WikiLeaks
LONDON, Jan 31 (Reuters) - A British minister advised the Libyan government how to secure the early release of the Lockerbie bomber, a newspaper reported on Monday, citing documents obtained by WikiLeaks.
Within a week of Abdel Basset al-Megrahi being diagnosed with terminal prostate cancer in October 2008, Bill Rammell, then a junior Foreign Office minister, wrote to his Libyan counterpart advising him how this could be grounds for securing Megrahi's compassionate release from prison, The Daily Telegraph said in its Tuesday edition.
The newspaper said the disclosure seriously undermined the previous Labour government's assertion that it was not complicit in Megrahi's 2009 compassionate release from a Scottish prison.
The Daily Telegraph is publishing more than 480 U.S. documents detailing international relations with Libya over the past three years that it said were obtained by the WikiLeaks website and passed to the newspaper.
The British government says the decision to free Megrahi, jailed for life for his part in blowing up Pan Am Flight 103 over Scotland in 1988, was taken by the devolved Scottish government alone.
Megrahi was thought to have just months to live but remains alive today in Libya.
The release fuelled anger in the United States, because 189 of the 270 victims were American, leading U.S. politicians to question whether commercial considerations played a part.
The Daily Telegraph said a senior Foreign Office official later briefed the U.S. ambassador to London on Rammell's letter, which it said outlined the procedure for obtaining compassionate release.
The Labour government in power in London at the time of Megrahi's release has since been replaced by a Conservative-Liberal Democrat coalition.
Responding to The Daily Telegraph report, a Foreign Office spokesman said the government believed Megrahi's release was a mistake and that the decision was made solely by the Scottish executive.
He said Prime Minister David Cameron had asked a senior official to review papers held by the government to see if more should be published about the background to the decision to free Megrahi and the review would be completed as soon as possible.
The Daily Telegraph said the latest WikiLeaks documents showed British ministers and officials were desperate not to allow Libyan anger over Megrahi's imprisonment to derail the growing commercial relationship between the two countries.
Britain's Guardian newspaper, quoting other U.S. diplomatic cables obtained by WikiLeaks, reported in December that Libyan leader Muammar Gaddafi threatened to cut trade with Britain and warned of "enormous repercussions" if Megrahi died in jail. (Reporting by Adrian Croft; Editing by)