TRIPOLI: The terminally ill Libyan convicted over the 1988 Lockerbie bombing flew home from Scotland to a joyous reception after being freed on compassionate grounds despite fierce US opposition.

Ignoring a US warning against a "hero's welcome," hundreds of young people waving Libyan and Scottish flags greeted the aircraft carrying Abdelbaset Ali Mohmet al-Megrahi as it landed in Tripoli amid heavy security.

He emerged from the plane wearing a dark suit, his hand held by Libyan leader Moamer Kadhafi's son Seif al-Islam, who was in the delegation that flew to Scotland to bring him home.

The only person found guilty of blowing up a US Boeing 747 airliner and killing 270 people, Megrahi said earlier he was "very relieved" to be freed but described his original conviction as a "disgrace."

Earlier, US President Barack Obama had called his release a "mistake."

"We have been in contact with the Scottish government, indicating that we objected to this, and we thought it was a mistake," Obama said.

Obama added that "we're now in contact with the Libyan government and want to make sure that if, in fact, this transfer has taken place, that he's not welcomed back in some way, but instead, should be under house arrest."

"We have said to Libyan officials quite clearly that he is not entitled to a hero's welcome," said State Department spokesman P.J. Crowley.

"We will be watching very carefully to see what they do upon his return and we have told them that this will be something that will potentially affect our future relations," he said.

But hours later loudspeakers pumped out patriotic music as hundreds of people celebrated the arrival of Megrahi's plane at Tripoli airport.

"At this historic moment, I would like to thank the Scottish government for its courageous decision and understanding of a special human situation," Seif al-Islam was quoted as saying in a statement posted on the website of his Kadhafi Foundation.

The Cairo-based Arab League welcomed Megrahi's release on health grounds.

And Assistant Secretary General Ahdmed Bin Hilli told the official MENA news agency he hoped that "Libya would receive compensation for its suffering during the years of ongoing sanctions as a result of this crisis."

In 2003, Libya agreed to pay 2.7 billion dollars in compensation to Lockerbie relatives, paving the way for a thawing of relations with the West.

Four hours before his arrival home, dressed in white from head to toe and covering his face with a scarf, the 57-year-old walked unaided up the steps of the Libyan jet sent from Tripoli to collect him.

His release from a prison near Glasgow came barely an hour after Scotland's justice minister said Megrahi was being freed because he was expected to die of prostate cancer within three months.

"Scotland will forever remember the crime that has been perpetrated against our people and those from many other lands," Justice Secretary Kenny MacAskill said.

"Our justice system demands that judgment be imposed but compassion be available. Our beliefs dictate that justice be served, but mercy be shown."

Later Thursday, however, US Attorney General Eric Holder said in a statement: "The interests of justice have not been served by this decision.

"There is simply no justification for releasing this convicted terrorist whose actions took the lives of 270 individuals, including 189 Americans."

Megrahi, in a statement issued by his lawyers after his departure, said he was "obviously very relieved to be leaving my prison cell at last" -- but called his 2001 conviction "nothing short of a disgrace."

"This horrible ordeal is not ended by my return to Libya, it may never end for me until I die. Perhaps the only liberation for me will be death," he said.

Megrahi's wife Aisha, preparing to welcome him home at the start of the Islamic holy fasting month of Ramadan, told AFP: "I am overjoyed; it is indescribable. It is a great moment which we have been waiting for for nine years.

"The house is full to bursting; everyone who loves Abdelbaset is with us."

But many US relatives of Lockerbie victims were very angry on Thursday.

Susan Cohen, who lost her daughter Theodora, called the decision "appalling."

"You want to feel sorry for anyone, please feel sorry for me, feel sorry for my poor daughter, her body falling a mile through the air," Cohen told CNN. "This is 270 people dead; this is a convicted mass murderer and terrorist."

Under headlines such as "An Affront to Justice" and "A shabby deal and the betrayal of justice," British newspapers said Megrahi should have remained behind bars in Scotland.

The bombing of Flight 103 over Lockerbie in Scotland on December 21, 1988, was the worst terrorist attack committed in Britain. Megrahi was convicted in 2001 after a trial held under Scots law in the Netherlands.