London, England (CNN) -- The British government called the freeing of the Lockerbie bomber a "mistake" Friday amid renewed questions over his release.
Britain's ambassador to the United States, Nigel Sheinwald, said the government believes it was wrong to let Abdelbeset Ali Mohmed al Megrahi out of prison in August 2009 and return to his native Libya, but it was a decision taken by the Scottish executive, not the British government.
Scotland has its own government that is responsible for most of the day-to-day issues there, including the justice system. Scottish Justice Secretary Kenny MacAskill freed al Megrahi in August after doctors concluded he had terminal prostate cancer and three months to live.
The ambassador's statement came a day after the U.S. Senate Foreign Relations Committee announced it will hold a hearing July 29 to examine al Megrahi's release.
Despite that terminal prognosis, al Megrahi is still alive, and news reports in recent days have questioned whether he was as sick as depicted. Questions also have been raised about whether a deal was cut to release him to protect British business interests in Libya.
Sheinwald said such speculation is unfounded.
"Claims in the press that Megrahi was released because of an oil deal involving BP, and that the medical evidence used by the Scottish executive supporting his release was paid for by the Libyan government, are not true," he said.
Al Megrahi, now 58, was convicted of involvement in the December 21, 1988, bombing of Pan Am Flight 103 over the Scottish town of Lockerbie. The attack killed 270 people, including 11 on the ground.
He was the only one ever convicted in the case.
Last week, a group of U.S. lawmakers called for an investigation into whether oil giant BP may have played a role in lobbying for al Megrahi's release. BP and the British government have consistently denied any involvement.
BP said it did express concern to the British government in late 2007 about the slow progress of a prisoner transfer agreement that Britain and Libya were negotiating, saying it could have had a "negative impact" on British commercial interests.
BP was not, however, involved in any talks with either the British or Scottish governments about al Megrahi's release specifically, the company has said.
In an interview with CNN, Shokri Ghanem, chairman of the National Oil Corporation of Libya, denied allegations of an agreement to free al Megrahi in exchange for bolstered BP commercial interests in the country.
Scotland also denied any contact with BP over the al Megrahi case. It said his release was on compassionate grounds and was separate to the prisoner transfer agreement.
"We were always totally opposed to the prisoner transfer agreement negotiated between the U.K. and Libyan governments," a Scottish government spokesman said in a statement. "The memorandum that led to the [transfer deal] was agreed without our knowledge and against our wishes.
"Indeed, the justice secretary rejected the application from Libya under the [prisoner transfer agreement] specifically on the basis that the U.S. government and families of victims in the U.S. had been led to believe that such a prisoner transfer would not be possible for anyone convicted of the Lockerbie atrocity.
"Mr. Megrahi has terminal prostate cancer and was released on compassionate grounds alone. He was sent home to die according to the due process of Scots law, based on the medical report of the Scottish Prison Service director of health and care, and the recommendations of the parole board and prison governor -- all of which have been published by the Scottish government."
The fact that al Megrahi is still alive does not change the Scottish government's thinking about his release, the spokesman said. The three-month prognosis was a "reasonable estimate" based on "a range of expert medical advice," he said.
"As Mr. MacAskill said at the time of his release, he may live longer or he may die sooner, but what is undeniable is that he is terminally ill."
Sheinwald wrote a letter Thursday to Sen. John Kerry, D-Massachusetts, chairman of the Senate Foreign Relations Committee, denying any link between commercial activities and the Scottish government's decision to release al Megrahi.
The letter said, "We have to accept that there is now no mechanism for requiring a person who has been released on compassionate grounds to be returned to prison if they have survived for longer than the prognosis at the time."