Use of the veto could end an agreement under which Tripoli accepts responsibility for the 1988 Lockerbie bombing and pays compensation to the victims' families.
  
Unnamed US officials, quoted by AFP, say France would block the sanctions-raising resolution unless Libya increases the amount of compensation it is paying for the 1989 bombing of a French UTA airliner.
  
"The threat has been made and it is still there," one official said. "They're trying to get a better deal for their own people by punishing the Pan Am 103 families and its absolutely outrageous." 

"It's not our fault that the French let their people get screwed."

Unnamed US official quoted by AFP

"Blackmail is an ugly word, but that's what the French are doing," a second official said. "They are holding the Lockerbie deal hostage."
  
French position

On Thursday, French Foreign Minister Dominique de Villepin conveyed Paris' position to US Secretary of State Colin Powell and British Foreign Secretary Jack Straw during separate telephone calls.
  
One US official said the conversation with Straw had been particularly contentious with de Villepin insisting that France did not want to sabotage the Lockerbie deal but had little choice unless Libya paid more compensation to the UTA victims' families.
  
"It's my understanding that it got really heated," the official said of the de Villepin-Straw call. 
  
The French foreign ministry has made clear it believes the UTA families should be compensated with the same amount the Lockerbie families are to receive.
  
The ministry said that de Villepin had been in touch with Tripoli, Washington and London to "remind them clearly of our position and our determination."
  
Spokeswoman Cecile Pozzo di Borgo said France "is not prepared to waver on this".
     
Compensation

Libya has agreed pay the Lockerbie families up to $10 million each, a fraction of the amount it agreed to provide to the families of the 170 victims of the UTA bombing who are to split a $33 million payout – or just over 50 times less.
  
De Villepin asked Powell for more time before the resolution is tabled at the Security Council in order to renegotiate the UTA deal with Libya.
  
Otherwise, and unless Libya agrees to pay more to the UTA families, France would use its veto, di Borgo said
  
The US officials said there was growing anger in Washington at the French position.
  
"This is nothing but sour grapes," said one. "We're getting a better deal and they're upset. It's not our fault that the French let their people get screwed."