Abdul Baset Ali Mohmed al-Megrahi, a Libyan spy, is serving a life sentence in Greenock Prison for his part in the explosion over Lockerbie, in which 271 people in the air and on the ground were killed.
By dropping his appeal, al-Megrahi ended any active case against him and fueled speculation he could be released from prison soon on humanitarian grounds, The Times of London reported Tuesday.
Al-Megrahi asked to be sent back to Libya on humanitarian grounds because he has advanced prostate cancer.
Since he dropped his appeal, Scottish Justice Minister Kenny MacAskill will determine whether al-Megrahi can travel to Libya, either released through clemency or transferred to a Libyan prison, the British newspaper said.
"The Justice secretary is continuing his considerations of both the applications before him, one under the U.K.-Libyan Prisoner Transfer Agreement, and the other on compassionate grounds. He expects to make a decision soon," the Scottish Justice Department said in a statement.
The Times, citing unnamed sources, reported Monday there was "no chance" of al-Megrahi being returned to Libya for humanitarian reasons. The British newspaper said U.S. Secretary of State Hillary Clinton had intervened, prompting Scottish First Minister Alex Salmond to speak to MacAskill, reportedly telling him of an international backlash if al-Megrahi were freed.